Setting a Listing Price

I used to set a listing price much as an appraiser would to determine the value of a house. I would find houses that were similar in price, location, and size that had sold up to 6 mos. in the past. However, in selling a house, we know that it is the market that determines the value of the house and that changes day-to-day, week to week, and depends on who the prospective buyer is. The old way of determining value may work in a large city or when there are many houses on the market. However, in any market, you want to judge the current market climate. I now use a wide angle lens to determine the listing price of the house. 

This wide-angle lens looks at what the buyers will find on the market at the time the listing goes active. This approach creates 3 stacks of MLS printouts for the seller to review other listings currently on the market with similar price, location and size/number of bedrooms. This has two benefits. The first is that the Seller is able to see where their house fits into the current market near their specific location, size and price range.  They can also see what amenities the houses have that are in the price range which they were hoping to achieve with their house. This is very different than looking back to see how their property compared to houses on the market up to 6 mos. ago. Importantly, this places the owner in charge of setting their own listing price.  

Setting the listing price from the perspective of the buyer helps you to know who your competition is when you’re selling your house.  Ultimately it’s the market that determines the value of the property at the time the listing goes active.