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The first thing buyer’s ask is “How much is your asking price?”   If the price is too high, the buyer will quickly lose interest.  If the price is too low, you will quickly lose money.

In order to price a home correctly, you must understand your local real estate market and your competition.   The goal is to set an asking price that successfully competes with homes that are comparable to yours.   Setting the correct price is easy to do, if you follow these 6 simple steps.

Step 1.   Get to Know Your Competition:  Drive through your neighborhood, and other area’s that compete with yours.  Identify the homes on the market that are similar to the one you are selling, with approximately the same size and age as yours, with the same number of bedrooms, baths and lot size.   Visit local real estate websites, infotube.net, realtor.com, zillow and trulia to verify property details, square footages, asking prices, etc.  These website can also help you find a complete listing of all homes that you may not have found on your drive by search.

Step 2:   Tour Open Houses:  Visit as many open houses as you can to see for yourself how your home compares.  Learn as much as you can about the condition of these homes, such as upgrades done to the kitchens, baths and bedrooms.

Step 3:   Find Recently Sold Properties:   To correctly price your home, you need to know what others like it have actually sold for.   To find out this information, you can visit your local tax assessors office, as housing data is public information.  The internet can also cut down on your homework.  Many tax assessor offices provide housing data online.  You can also educate yourself by reviewing the “Recently Sold” feature at Zillow and Trulia.  While these technology websites don’t have data for every location, they do cover most of the country.

Step 4:  Add and Subtract:  You now have information about property currently on the market and data for recently sold homes.   Evaluate the asking and sales prices, property details, neighborhood ammenities and ask yourself how your home measures up?  

Step 5:  Be Honest and Impartial:   This is the hardest step for anyone attempting to value their own property.   Even Realtors, who price homes for a living, are notorious for overpricing their own homes.  Forget about what houses sold for in the past.  In most area’s, prices have decreased 15-20 percent in the past year alone.   Price your property inline with your competition or it will simply sit on the market.   Only competitively priced homes are selling in this market and buyers will only purchase what they perceive to be a good deal.

Step 6:  Set Your Price:   You have a complete picture of all the homes that compete with yours in the marketplace.   Price your property aggressively from Day One on the Market.   Pay attention to the effect subliminal pricing has on buyers and play to it.  If your competition is priced at $250,000, price your home at $249,000, for example.   Use your knowledge to to set a price that buyer’s can’t afford to pass up.

Congratulate yourself on a job well done!!!  Not only have you determined an asking price for your property, you’ve become an experienced expert in your local scene.  With your knowledge and sense of the competition, you will be able to honestly communicate about your homes’ advantages and disadvantages, when comparing it to other houses in the area.

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