A First-Time Home Seller’s Guide To Setting a List Price

List Price (definition): The targeted sale price for a home.

What is my home worth?

It can be a puzzling, very confusing question for first-time home sellers putting their house on the market. It’s the most critical decision in the home selling process, and one home sellers want to get right the first time.

“Pricing your home correctly can be the single most important factor when you’re selling your house,” The Balance’s Elizabeth Weintraub writes.

Determining the best list/asking price can feel like trying to calculate your home’s net square footage by hand. Setting an asking price that will get you an offer, or hopefully multiple offers for your home, is an art. But it doesn’t have to be honors calculus. By following a well-researched plan, you can determine a strong asking price for your home in short order.

“Setting the right asking price will make your home more appealing to the maximum number of buyers possible,” Quicken Loans’ Jamie Johnson notes.

Consult a Listing Agent

Also known as a seller’s agent, a listing agent is a real professional who represents the seller in real estate transactions. A listing agent can access market data and lean on real estate experience to determine the best, most reasonable asking/list price. A professional home appraiser can also determine the fair market value of your home.

Leslie Griggs, with Skogman Realty, has extensive experience and expertise in determining the best list price for Eastern Iowa homeowners and brings a relatable perspective to assist you on your journey in real estate.  She will help find the right list price for your home.

“By and large, your list price is determined by your current real estate market conditions – what people are willing to pay for a home like yours,” Homelight’s Dena Landon and Christopher Rogacz write. “It’s extremely important to get the list price right from the first day your home goes on the market.”

You want to weigh market factors equally to ensure you arrive at a list price that gives you the optimum profit and sets your home in the price range of prospective Eastern Iowa buyers.

“Pricing your home too low means leaving money on the table, but pricing too high can mean your home sits on the market,” Landon and Rogacz stress.

List Price X-Factors

Your home’s best or ideal list price is based on a variety of influential considerations:

• Your Home’s Location
• The Final Sale Price of Comparable Homes in Your Area
• Current Market Conditions
• Your Home’s Conditions

For example, a fixer upper will not be listed for a property classified as turn-key or move-in ready.

REALTORS know the average going rate for homes in your neighborhood. The asking price of home should be within 10 percent of the average sold price in your neighborhood. A Comparative Market Analysis (CMA) can examine home sales in your area, enabling you to determine your home’s market value.

Be sure not to list your home higher than neighborhood homes with more square footage, a bigger lot, and a more recent build date. Also, don’t overvalue recent home improvements. Few homes return 100% of home improvement investments.

Going Low

You don’t want to undercut your home’s profit margin by undervaluing your home. However, a low list price can kickstart interest in your home. Properties priced below market value often receive multiple offers. The competition drives the price up to market value.

Just like everything, the home pricing game is all about supply and demand.

The Starting Point

Remember, your list price is the amount you’d like to receive for the property you are listing. It is your starting point and line for your home’s sale process. It is not, though, the finish line.

“This number serves as the baseline for attracting potential buyers,” Orchard’s Nick Perry notes.

The selling price is the amount you eventually agree to sell your house for after negotiating with a prospective buyer. In most home sales, the list and selling price end up different.

By knowing your home’s condition and market factors, you and your REALTOR can find the right listing price for your home.

Be willing to negotiate, but also know and protect your home’s worth, because your home is your most important financial asset.