You need to price your home fairly and competitively, but you still want to make a profit. It can be a hard line to walk because many people attempt to base their homes value on how they feel about, rather than its actual virtues. Unfortunately, sentimentality has no value for potential buyers.
How Realtor® chooses your price point
Your Realtor® will be very familiar with the local market and with just a little bit of research they will be able to see what homes like yours have sold for recently, in your area. This will provide you and your realtor with an idea of what buyers deem acceptable for your area, and give you a place to start when pricing your home.
You may feel that your home is worth about $150 000 now, since you paid $80 000 for it twenty years ago and invested in some updates. That’s a $70 000 profit. But your Realtor® may discover that similar homes in the area have been selling for close to $200 000. The higher than average list price gives you the leverage you need to price the home in that range, equating to a much larger profit for you. The trick is that you don’t want your home sitting on the market too long, either. In order to achieve a quick sale, you’ll want to price your home lower than the market average for your area, but not too much lower.
If you were hoping to snag $150 000, and the market says you can easily sell for $200 000, consider pricing your home at $195 000, which still leaves you with a hefty profit, even if you don’t get the exact asking price. If you manage to sell for $185 000, you’re still netting a profit of $105 000, and the chances are that since you listed at a lower than average price, you will garner a lot of interest very quickly.