How to Price Your Home to Sell, According to the Experts

Everyone wants to get the most money possible when selling a home, but how do you know what your home is worth? Pricing a house to sell can be tricky. Market conditions, the state of the home and your sales timeline will all impact the listing price.

We spoke with real estate experts to explain the home valuation process. These are their pricing tips to help you get top dollar when it's time to sell your house.

The starting point to selling your home is determining the right price to list it at. Online home valuation tools are an easy way to start your home valuation journey. For example, Homes.com offers the ability to run a Home Valuation Report from every listing on the site, giving you an initial idea of what your home is worth. 

A real estate agent will best understand the intricacies of your local market and how your home compares with other recently sold homes. For example, why does a home on one street warrant a higher price than another that’s two blocks over?

The best way to value your home is to have your agent run a comparative market analysis (CMA). Most real estate agents do this before recommending a sales price.

The goal of a CMA is to find high-quality comparable homes (comps) that clearly illustrate a realistic price range in today’s market. The comps should be similar in location, age, square footage, condition, design and features. If you’re evaluating a single-family home, the comps should have a similar acreage or lot size. Ideally, you want a like-for-like comparison between other properties and your home.

Your real estate agent (or appraiser) will find the best matching homes for sale, pending sales and sold listings within the last 180 days.

Sales prices fluctuate due to seasonality, the mortgage market or more significant economic trends, so the comps must be as recent as possible. A CMA is only good for a limited amount of time. A valuation made six months ago may not be an accurate estimate if you want to price your home today.

Delaine Peden, a real estate agent and certified residential appraiser with DK Home Appraisals and Sales in the greater Dallas, Texas, area says she aims to use comps within the last three months. 

If the market is slowing, she looks at days on the market more than anything.

“If there are a lot of properties for sale, but they've been sitting on the market for longer than typical, that lets us know your home also likely won't sell at that price,” explains Peden.

“One of the most important factors when pricing a home is location,” says Peden. “We compare the property to similar properties in the immediate area or competing neighborhoods.”

Jason Ostrowsky, a Tri-County Suburban Realtors board of directors member and real estate agent serving the suburban Philadelphia, Pennsylvania, metro area agrees that location often matters more than the home itself. 

Ostrowsky asks, “Are you walkable to school, to town, shopping and dining? How safe is the neighborhood?” Buyers want different things, but your home can sell for more if it is in a desirable location or close to amenities.

After looking at the neighborhood, the home’s features and condition will have a significant impact on the asking price. Peden notes that the quality of the house, including building materials such as flooring, countertops, shower tiles and shutters, can all impact the list price. Pools, workshops, backyard space, fireplaces and other amenities will also affect pricing.

Look at your home’s condition realistically. It’s not uncommon for a seller to be emotionally attached to their home and perceive its desirability through rose-colored glasses.

Ostrowsky says you shouldn’t just look at aesthetic upgrades you may have done, like re-doing your kitchen, bathroom or flooring. “These amenities are always attractive to buyers, but it’s also about the bones of the home, things like the roof, HVAC or plumbing,” he says.

If the home needs significant repairs, it may be best to price it lower and allow the seller to improve it. If small repairs or minor updates will help the home sell for more or appeal to a broader pool of buyers, consider making those changes before listing.

Pricing a house to sell isn’t linear across all markets. Real estate is highly localized, and outside factors like supply and demand create different market conditions.

Safety, proximity to public transportation and local amenities like shopping, restaurants, parks and desirable schools can impact demand. More significant factors like housing affordability, mortgage rates and the supply of homes in your area also affect how home prices are determined.

Generally, there are three types of housing markets:

• In a seller’s market, the demand for homes exceeds the supply. Typically, homes sell quickly for top dollar in these markets. 
• In a buyer’s market, homes usually take longer to sell and sell for less money as supply outpaces demand. 
• In a balanced market, you find a mix between the two.

It’s important to stay informed of local real estate trends and adjust your pricing strategy based on those market dynamics.

Some sellers use sales tactics when pricing their homes. Some might think that pricing a home just below $300,000 (at $299,997, for example) creates the perception of a deal or a lower price. This technique may work in other retail sectors, but Ostrowsky feels it isn’t best for real estate.

“When people search online, they typically search in segments. One buyer might be searching for $250,000 to $300,000 and another for a home priced $300,000 to $350,000,” Ostrowsky explains. By pricing at $300,000, you are bridging the gap between the buyers in both brackets and opening the door to more potential buyers.

Ostrowsky feels that a better pricing strategy comes from a point of strength. “My strategy is to start more aggressively to draw more buyers into the property psychologically, enabling us to get more offers and negotiate the price up from there,” says Ostrowsky.

Pricing your home low can garner increased attention on the home and, in certain markets, create a bidding war. Bidding wars can net you more than you would have gotten had you priced high to begin with.

You want to avoid starting with a high price and getting to a point where you need to make price cuts. “It creates a position of weakness,” Ostrowsky says. In his opinion, there is no downside to starting lower. “If there are no offers at that price, the market is talking to us and telling us the lower number is still too high,” he says.

An agent knows the nuances of the marketplace and understands how market conditions may shift.

“Pricing is based on concrete evidence that we see in the market,” says Ostrowsky. No matter the market conditions, a real estate agent is your best reference for pricing a house.

If you’re unsure how to price your home, get professional advice from a listing agent. Most will offer a CMA for free before signing any listing agreements.

Remember to keep your home in the best possible shape before listing. Fresh, neutral paint throughout the home, minimal clutter and a clean space go a long way when prepping your home for sale. If your house is vacant when you decide to sell, stage the property to make it feel more homey.

Ostrowsky emphasizes the importance of curb appeal as it is the first impression your potential buyers will see. If you need more eyes on your home, have your agent hold an open house.

The best way to determine your selling price is to talk with an expert and get a pulse on the current market.

Remember to consider the differences between your home and others that recently sold. Be realistic about your home and what the market could net you based on its condition.