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How to Set Your Selliing Price
By Randy
June 20, 2017

How to Set Your Selling Price

When you decide to sell your home, one of the things you'll need to do is to determine an asking price. This can be difficult because you need to find a balance between attracting good offers and getting a high profit.

As you figure it out, you'll learn about fair market value, which means the amount that you and the buyer can agree on (can be subject to some conditions). It is different from an asking price.

Overpricing sometimes also works to your advantage, but be careful; it might cost you more in the end. There may be several factors that can prompt you to set a high asking price -

  • If you've made some improvements/additions. Don't expect to get a full return for what you've spent on these projects. Some additions made that seem to suit your personal preference (like a new paint of your favorite color; custom-made fixtures; a sunroom) can actually work against you.
  • Need for a lot of money;
  • You'll move to a more expensive house.
  • You originally bought the house for an overpriced amount.
  • You don't have much knowledge with regards to factual comparable sales.
  • You want bargaining room.
  • The move isn't necessary.

Usually, the asking price is 1 - 3% higher than the market value. You should expect negotiations to take place until you and the buyer reach a price you can both agree on. If your asking price is a lot higher than the market value, you won't have much offer and your house will stay long in the market, reducing its value eventually. Some buyers wait until sellers reach a point where they seem desperate to sell their home.

Think about the outcome you want. Do you want to sell quickly or you prefer to get as much profit as you can? Is the amount being suggested by your agent fair enough for you? If you were the buyer, would you buy it with the price you set?

You, as owner of the house will have a hard time assessing your house in an objective manner. Bring in some friends and relatives who can help you on this. A third party can help you see your house with all positive and negative points. This is essential in determining the selling price for your home. You should also compare it to the price of comparable houses in your area.

Helpful Tool: Click HERE for the 2017 Cost vs. Value report for Minneapolis/ St. Paul Area to find out what home improvement projects yield the best return on investment for homeowners.