How to Price Your Home

Pricing decisions should be grounded in reality rather than hopeful thinking

Forget your personal point of view. How much is a buyer willing to pay for your home? Buyer's don't care how much you paid for the home, your cherished moments, how much cash you need for your new downpayment or how much is left on your mortgage.
Interview a few Realtors. Invite several real estate agents to visit your home and give you their opinion of its likely selling price and ask for a "comparative market analysis" (CMA), which shows the prices of comparable recently sold, on-the-market homes, and homes that were on-the-market (but never sold). Recently sold homes gives you an idea of what your home may potentially sell for, on-the-market homes are the competition, and homes that were on-the-market may give you an indication of what to ask for or what to make sure you complete before you list. Every agent has their own selling technique, what fits your personality best?
Do you own market research. Visiting open houses or checking out for homes for sale in your area will give you a strong idea of prices with regards to location, size, amenities and condition. Try to avoid justifying items to yourself about your home, being impartial is the difficult but most important portion.
Calculate the price per square foot. The average price per square feet for homes in your neighbourhood shouold not be the only determinant of the asking price of your home, but it sets the grounds for competition. Keep in mind there are various ways to calculate square footage, talk to your realtor for help!
Consider market conditions. Are home prices in your area climbing or falling? Are homes selling quickly or constantly being lowered in price. Will your home be on the market at the peak season (spring) of each year or in the dead of winter? What are the current market's interest rates? Is it a buyer's market or a seller's market?
Sweeten the Transaction terms. Some buyers have needs that go beyond the bottom line. If you're willing to close quickly, you'll attract buyers who want to move in right away. If you can offer seller-financing, your home will appeal to buyers who need to stretch their financial resources. The more creative your realtor is, and the more flexible you are, the more success you'll have in pricing your home to sell.