The decision about how much to ask for your property is always yours. When setting a sales price for your home, it’s really important to set aside your personal feelings and think about it from a buyer’s point of view. Your agent will search for homes similar to yours that are on the market now—your competition—and for those that have sold recently. This information will help you decide on a price that will get your house shown to prospective purchasers AND get it sold.

If you set the price too high, it’s likely that buyers will leave it off their list of homes to view. Even if you think it’s much nicer than others on the market, potential buyers won’t see it because you didn’t make their list. Some sellers will price their homes high and tell their agent they’ll look at all offers. However, if the buyers aren’t getting inside and taking a look, there won’t be any offers to look at. If it buyers think your home is too expensive to be considered, it will get skipped completely. In addition, starting with an overly high price and then lowering it may suggest to other agents and potential buyers that you are now desperate to sell.

On the other hand, pricing your home too low may mean you’ll lose money. A low price may mean that you sell very quickly, but before there’s enough time to find the buyer who would have paid more. There’s a fine line here, and your agent has the resources and expertise to find and interpret the information for you. Here’s a partial list of what you can expect from us:

• A comparative market analysis (we call it a CMA): What has sold recently that is similar in size and amenities to yours? What’s on the market now that will be competing for buyers’ attentions? What failed to sell, and what was the list price?
• A market condition analysis (this is supply and demand): What’s the home listing inventory in the area? What’s the average selling time for similar homes?
• A discussion of incentives to offer buyers: What are the advantages of offering to help pay the buyer’s closing costs? How about allowances for new carpeting or appliances? Should you offer to participate in loan programs that have very low or no down payment options?
• A sales proceeds estimate: What will you receive if you sell at a certain price?

In general, you don’t need to get a formal appraisal at this stage; a CMA is probably enough to help you set the right price. A formal written appraisal will cost several hundred dollars and will be based only on recent sales of similar homes (and not current or expired listings). Buyers probably won’t be able to use it for obtaining a loan as lenders almost always want to order a separate appraisal themselves. A formal appraisal can be invaluable, however, if you have a unique property, if co-owners can’t agree on a price, if there’s been little or no activity in your area within the recent past, or if there are other circumstances that make it difficult to put a value on your property.