Before Setting a price – do your homework
When you set your price, you make buyers aware of the absolute maximum they have to pay for your home. As a seller, you will want to get a selling price as close to the list price as possible. If you start out by pricing too high, you run the risk of not being taken seriously by buyers and their agents and pricing too low can result in selling for much less than you were hoping for.
Setting your Home's sale price
If you live in a subdivision. - If your home is comprised of similar or identical floor plans, built in the same period, simply look at recent sales in your neighborhood subdivision to give you a good idea of what your home is worth.
If you live in an older neighborhood. - As neighborhoods change over time each home may be different in minor or substantial ways. Because of this, you will probably find that there aren't many homes truly comparable to your own. In this case, you may want to consider seeking a Realtor to help you with the pricing process.
When getting an appraisal is a benefit
Sometimes a good appraisal can be a benefit in marketing your home. Getting an appraisal is a good way to let prospective buyers know that your home can be financed. However, an appraisal does cost money, has a limited life, and there's no guarantee you'll like the figure you hear.
Ensure you have room to negotiate
Before settling on your asking price, make sure you leave yourself enough room in which to bargain. For example, set your lowest and highest selling price. Then check you priorities to know if you'll price high to maximize you profit or price close to market value if you want to sell quickly.
You should have an idea of what closing costs you will be responsible for. You agent should be able to give you what is called a good faith estimate sheet with these numbers. Remember your closing costs will change if the selling price of your home changes.
You should also ask your agent to provide you with what is called "comps". Comps or comparisons, are what other similar homes in your area are selling for and have sold for. What you are most interested in here is comps for homes within a three to four mile radius. You need to ask your agent to see comps for both homes for sale and for homes that have sold within the last three months. The comps should be for homes that are very similar to yours. For example: If you have a home that is two stories with four bedrooms, a comp for a home that is a ranch and three bedrooms would not be a good comp.
Comps older than three to four months old are generally not a good indicator for determining the selling price of your home. The market changes frequently and you need to see the most recent activity.
Your comps along with your agent will help you determine what would be a good asking price for your home. Just remember you should never decide upon an asking price without looking at comps first, if your agent will not do this for you then find a new agent now.
Another great way to get an idea for setting an asking price for your home is to go out and view some of your comps. This will give you a good feel for what your competition is in your price range.
Your asking price can make or break potential sales, take your time and do the research before you set your selling price!