NWHomePro Advice Center

Setting The Price

Price is the first thing buyers notice about a property. Setting a price too high makes the odds high for alienating buyers. A reasonable seller, of course, wants his house to be taken seriously—and the asking price reflects how serious he is about selling.

Several factors contribute to a seller's final decision about price, but the process should always begins by comparing his property to others on the market. Sellers who use a real estate professional will receive a Pricing Analysis, often referred to as a CMA or comparative market analysis. When properly done, this report will reflect the following:

Properties of similar building and lot sizes, as close as possible to the local area, that have sold within the last six to 12 months;
Asking and selling prices of those properties;
Inventory of properties currently on the market;
Age and features of the properties on the market.

From the Pricing Analysis, a seller can discover the difference between the asking prices and selling prices for similar properties sold, the average amount of time it takes to sell a similar property, and the condition and characteristics of these similar properties. He also can learn what types of houses are selling best throughout the broader market, and see how that applies to his area. Buyers follow trends, and these trends can help set the price.

Furthermore, each seller should always be realistic relative to his current financial situation and his motivation for selling. It's important for the seller to be honest with himself and his agent about these factors, which will help the agent in providing accurate and useful advice with regard to any price being considered. Above all else, however, every seller must take into account the current market situation.