How to Determine Your Listing Price
Pricing your home is an art, not a science. Achieving the optimal listing price requires both objective research into similar properties and instinct in determining how much a buyer will be willing to pay for your home. The correct price will attract showings, which will generate offers.
Unfortunately, price is the number one factor that most home buyers use when determining which properties to view. Although you and your Realtor set the asking price, the selling price is determined by how much a home buyer will pay.
The Correct Price Will:
First, pricing competitively leads to a quicker sale, minimizing the seller’s inconvenience. Additionally, it exposes the property to more buyers, broadening its appeal. This approach boosts Realtor response, drawing greater interest. Furthermore, it generates more ad calls, increasing visibility. Finally, it keeps your listing fresh, preventing it from becoming stale or “shop-worn.”
Typically, homes that sell quickly sell closer to and often over asking price.
Some Common Reasons for Overpricing
The property is over-improved. The original purchase price was too high. Buyers want negotiating room.
Overpricing Pitfalls
Most of the activity on your home will happen in the first few weeks. That’s why pricing it correctly from the start matters. The right price creates urgency and excitement for buyers and their agents. Many buyers have already seen most homes in their price range. Now, they’re just waiting for new listings or price drops. If your home is priced too high, those buyers may skip it entirely.
Worse, it may be too late if you wait too long to reduce the price. Interest fades—both from buyers and Realtors. Time on the market matters. Buyers and their agents always ask, “How long has it been on the market?” If it’s been a while, they often assume something’s wrong and hesitate to make an offer. In the end, an overpriced home may simply help your neighbor sell theirs. Reasonably priced homes always attract more attention—and better offers.
The Role of a Real Estate Agent in Pricing
First, your agent compiles a comparative market analysis, comparing recently available, in-escrow, and sold homes with similar amenities to yours, revealing your competition. Next, understand that no exact price exists; your home’s value depends on what a buyer will pay. Finally, the market sets the value, but you and your agent decide the asking price together.
Real estate agents have no control over the market, only the marketing plan. The seller determines the asking price. Some inexperienced agents may try to “buy your listing”. Never select an agent based on their recommended asking price; select an agent based on their marketing plan. If you list with an agent who has provided you with an unrealistic asking price, they will only pressure you for a price reduction.
