Looking to sell your home this summer, but wondering where to start? The two most important factors to consider when putting your home on the market are its price and the agent you choose to have by your side. Today, we’re focusing on the first: finding the right price. And although the idea of pricing a home may sound intimidating, not to fear: we’re here for you every step of the way.

For Starters — Why is Pricing so Important?

You know how there’s nothing like the shiny allure of a home that’s been freshly placed on the market? Well, here’s the thing: overpricing your property right off the bat can tarnish that shine. Demand and interest typically wane after 21 days or so on market, and while there’s nothing stopping you from dropping your price later, you might as well get it right from the start — before it’s too late.

The Pricing Paradox

Although pricing too high can be a costly mistake, you shouldn’t worry about pricing your home too low. Properties priced below market value will often receive multiple offers that will then drive the price up to market. The bottom line? Pricing is all about supply and demand.

The First Step

First, you’ll want to pull every home similar to yours that’s been listed in the same neighborhood as your property over the last six months. Appraisers don’t use comps that are older than three months, so you might want to narrow the timeframe even more. Pro tip: The homes should be limited to those within a 1/4-mile to a 1/2-mile radius of yours unless there are only a handful of comps in the general vicinity or the property is rural.

It’s All in the Details: 

• Compare similar square footage within a 10% variance up or down, if possible.
• Compare similar ages. One neighborhood might consist of homes built in the 1950s, and it’s situated right next to another ring of construction from the 1980s. Values between the two will differ. Make sure you’re comparing apples to apples.
• Honestly assess desirability. You might be able to get away with tacking on a premium if you’re fortunate enough to own a dream home that will cause buyers to faint upon entering.

Check Out Sold Comps

Compare the original list prices of the homes to the final sales prices to determine any price reductions. Compare the final list prices to actual sold prices to determine ratios. Ideally, compare to at least three properties that sold at market value.

Look for Withdrawn and Expired Listings

Always remember to pull the history of any expired and withdrawn listings to determine whether any of them were taken off the market and re-listed. What does expired mean, you ask? That the term of the listing agreement ran out without a sale. Withdrawn, on the other hand, means that the listing agreement is still in effect, but the homeowner no longer wants to market the property. Add these days on market back to the listing time periods to arrive at an actual number of days the properties were on the market. Look for patterns as to why they didn’t sell and note any common factors they might share. For instance: which brokerage had the listing? Was it a company that ordinarily sells everything it lists, or was it a discount brokerage that might not have spent sufficient money on marketing the home?