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Determining Asking Price
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Determining Asking Price

© memyjo / Fotolia

Quick Takeaways

  • Some sellers are pricing their homes higher than ever just because they can, but this may drive away serious buyers and result in unapproved appraisals
  • The highest offer is not always the best offer – consider cash options and contingencies that could work in your favor
  • Hire a REALTOR® to help you navigate this once in a lifetime seller’s market

Source: 7 Tips and Tricks to Capitalize on Selling in a Seller’s Market (HomeLight, Apr. 29, 2021)

Real estate agents use a combination of market analysis, comparable sales data, property condition assessment, and local market trends to determine the asking price for a property. They begin by assessing the current real estate market conditions, including supply and demand dynamics, interest rates, and economic factors that can impact property values. They research recent sales of similar properties (comps) in the area to gauge the market value of the property. This involves looking at factors such as size, location, amenities, and condition.

Agents evaluate the condition of the property, including any upgrades or renovations that may increase its value. They also consider any issues or repairs that may need to be addressed before listing. They stay updated on local market trends, such as buyer preferences, neighborhood developments, and pricing trends. This information helps them fine-tune their pricing strategy.

Agents also take into account the seller's goals and timeline. For example, a seller who wants to sell quickly may price the property more competitively, while someone who can afford to wait may set a higher asking price.

Based on all the data gathered, agents may make adjustments to the initial price recommendation. This could involve adjusting for market conditions, property uniqueness, or other factors that may impact the property's value.

By combining these factors, real estate agents aim to set an asking price that attracts potential buyers, maximizes the seller's profit, and reflects the true market value of the property.

See References for more information.

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References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.

Top 5 Things Sellers Most Want from Real Estate Agents

  1. Help price home competitively
  2. Help seller market home to potential buyers
  3. Help sell the home within specific timeframe
  4. Help find a buyer for home
  5. Help seller find ways to fix up home to sell it for more

Source: 2023 National Association of Realtors Profile of Home Buyers and Sellers

The top reason sellers hire REALTORS® has to do with competitive pricing. Determining the asking price of your home is a huge step in your home selling process, and your local REALTOR® can help!

Determining the Asking Price: The Basics & Trends

How to Price Your Home to Sell (NerdWallet, Jun. 28, 2023)

“Pricing your house to sell requires a "Goldilocks" frame of mind. A price that's "just right" is the one that attracts a buyer, is in line with the market, and puts the most money in your pocket.”

How to Set Your Home’s List Price: 5 Factors that Matter Most (HomeLight, Aug. 16, 2023)

  • Location
  • Prices of recently sold homes
  • House condition
  • Home improvements and updates
  • Market conditions in your area

Local Market Reports (National Association of REALTORS®)

Monthly Housing Market Trends Report (realtor.com®)

Accurate Property Pricing with RPR (REALTOR® Property Resource)

“Here, RPR shares five tools that will help an agent refine the value of a property, use the platform’s flexible CMA tool, create a Sales Comparative Analysis and Valuation Workbook for harder-to-price properties, and run a real-time analysis for investment properties.”

Advice for Your Customers

How to Price Your Home for Sale (The Balance, Mar. 7, 2022)

When pricing your home, it’s easy to forget or overlook small details like neighborhood boundaries, which side of the street your home is on, and if it is close to train tracks or a highway. According the The Balance, “Identical homes directly across the street from each other can vary by as much as $100,000 in some neighborhoods. Perceptions of desirability have value.”

What Homebuyers Can Expect with an Appraisal — and What to Do If It's Below Your Offer Price (Freddie Mac, Feb. 3, 2022)

  1. If you find errors, request a new appraisal
  2. Renegotiate the sale price
  3. Find additional funds
  4. Continue with your search
A Wild Market Means More Home Appraisals are Coming in Low. Here’s What to Do if a Bad Appraisal Threatens Your Deal (Money, Aug. 12, 2020)

“According to the National Association of Realtors, 9% of contract terminations were caused by appraisal issues in June, up from 3% in April. In both months, problems with the appraisal caused 18% of closing delays, trailing only challenges obtaining financing.”

Home Price Calculators

Are You an Owner? Track Your Home (realtor.com®)

HPI Calculator (Federal Housing Finance Agency)

What's Your Home Worth? (Bank of America)

Home Value Estimator (Chase)

eBooks & Other Resources

eBooks.realtor.org

The Complete Idiot's Guide to Selling Your Home (eBook)

The Future of Real Estate Home Pricing (eBook)

How to Sell Your Home in Any Market (eBook)

Sell Your Home Now (eBook)

Selling Your Home in 45 Days or Less (eBook)

Seven Steps to Sold (eBook)

Tips & Traps When Selling a Home (eBook)

Books, Videos, Research Reports & More

As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.

Think Sold!: Creating Home Sales in Any Market (Washington, D.C.: BuilderBooks, 2009) HD1379 .L96 2009

NAR® Guide to Home Selling: Insider Tips for Home Selling Made Easy (Hoboken, NJ: John Wiley & Sons, Inc., 2007) HD 1375 N21n

Pricing Your Home to Sell — DVD, Item # 141-177

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