ABA Family Legal Guide

Buying and Selling a Home

The Steps of Buying and Selling a Home

Selling: Setting a Price for the Property

How do I establish the price of my home?

First of all, there is no "right" price. The value of your home is almost entirely dependent on what someone is willing to pay for it and how long you are willing to wait to find that person. Most sellers are not in the position to wait for the "ideal" buyer who will pay their "ideal" price. They want to find the optimum price at which their home will sell in a limited amount of time. To do this, they typically rely on comparisons with recently sold homes in the area. A real estate agent can help you by giving you a list of homes sold through the local multiple listing service during the past year or so. You can also locate this information on the Internet at free websites such as realestate.yahoo.com/re/homevalues and www.domania.com.

Once you have some basic sales information, you will need to match the features of the homes that have been sold to your own home. For example, if your home is a three-bedroom, two-bath ranch on a typical lot, your agent can point out sales prices of similar homes to determine a listing price. Try to limit your study to homes that are very similar to yours. If Victorian homes are prized in your area, even a Victorian needing work will be priced higher than other styles of homes of similar size.

To narrow the price range further, you'll want to look at amenities sought by buyers. An attached garage, a wood-burning fireplace, an updated kitchen and baths, a large lot, and spacious rooms are among the factors that generally increase a home's price. Conversely, expect the selling price to be lower if your home does not have these or similar amenities. Location is also a factor. Most buyers want good schools, ample transportation, quiet neighborhoods, and little if any commercial activity. The presence or absence of these factors will affect the selling price of your home.

Perhaps equally important are your reasons for selling and how long you can wait. Typically, the most interest is generated in the first few weeks a home is listed. If you want to sell your home fast, you'll want to price it so that it stands out among comparable homes on the market. If you are willing to wait and to endure continuous showings, you can afford to price it above the competition. Sellers who try to hold out for the highest price, however, may find themselves reducing the price down the line. A house that has been on the market beyond the average marketing time generates little interest from buyers, even when the price is reduced dramatically. Most buyers will assume that the home has problems that they, understandably, want to avoid.