Setting the list price for your property involves evaluating various market conditions and several financial factors.  During this process you need to be objective.  Buyers aren’t concerned with how much you paid for the home, or how much time and money you have invested in remodeling and other improvements.  If the price is too high, your home may not be selected for viewing and if you price too low, you’ll short change yourself.

Setting the list price and reviewing the following is important:

Comparable Sales

Check what homes in your area are selling for  The recently sold homes will have the most impact on your home’s value, while the homes currently on the market are your competition.Â
One major drawback is that in a hyperinflationary enviroment prices based only on past sales, may need to be adjusted regulary. If there has not been much sale activity in your area recently, that makes it a bit difficult to put a value on your property. you can still consider prices in adjacent areas.

Market Conditions

Consider the condition of your local market and how quickly homes are selling.  Think about your timing for selling the home, interest rates, and the local economy. In a strong or booming property market, prices are rising and homes sell quickly.  Conversely, in a slower market, the average sale can run into several months. In a seller’s market you can price a little high and gauge the reaction.  In a buyer’s market, if you need to sell quickly, offer an attractive price.

Offering Incentives

Some sellers choose to list their home at the lowest price that they are willing to accept, because they dislike negotiating.  Other sellers may add on thousands to the estimated value and then wait to see the reaction.  If you list high, and have the luxury of time to feel out the market, work out a schedule in advance.  If your home is not generating any interest it may be time to drop the price.

Sometimes buyers have needs that go beyond the bottom line and other incentives are as effective as lowering the price.  You may offer to pay some or all of the buyer’s closing costs and discount points. 

Net Proceeds

Once you have an estimate of market value, you can get a general idea of how much cash you might walk away with when the sale is completed.  This can be especially useful as you start to look for your next home. 

To calculate your net proceeds subtract the following items from the estimated sales price:

- Conveyancing fees (Lawyers’s cost)
- Real Estate commissions
- Capital gains tax and stamp duty
- Incentives

As far as closing costs are concerned, you and the buyer may agree on any arrangement that suits both parties

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