How to price a house to sell?

Start from what closed, not from what is asking

Comparable sales are the evidence; asking prices are opinions, including the ones that never sold. Pull closings from the last three to six months, same property type, same subdivision or immediate neighbourhood, similar in size and age. Then adjust, because none of them is your house.

The fewer adjustments a comp needs, the more weight it deserves. Three sales on your own street beat thirty across the valley.

• Living area, adjusted at the neighbourhood's dollars per square foot rather than at what it would cost to build.
• Lot: size, a corner or cul-de-sac position, and what the lot backs onto.
• Pool: in public remodelling figures a pool recovers a fraction of its build cost, so the adjustment is smaller than the invoice was.
• Condition and updates: a comp with a remodelled kitchen and new flooring is a different home, and the gap is usually thousands rather than hundreds.
• Storeys and layout: in valley subdivisions single-storey against two-storey is a real, separate line, not a rounding item.

Price per square foot is a cross-check, not a price

Dividing price by living area turns unlike homes into one number, which is why it is the fastest way to see whether a comps read has gone wrong. Use it to set the price and it will mislead you: it cannot see the lot, the condition, the layout or the garage, and small homes run higher per foot than large ones as pure arithmetic, because the land and the kitchen are spread over fewer feet.

The useful test is whether your number sits inside the range the neighbourhood's recent closings produced. The top of that range is a decision to be argued for, with the features that justify it. Above it is a decision to be reversed.

What the market's own numbers say about the discount

Three figures describe how much of the asking price a market is currently giving up. The list-to-sale ratio is the direct measure: the closing price as a share of the last asking price, so a ratio well under 100 percent means buyers are negotiating and a ratio at or above it means they are not. Days on market says how long the window is before a listing goes stale. The share of listings taking a price cut says how many sellers in this market got the first number wrong, which is the closest thing there is to a scoreboard for the mistake this page is about.

Kouzr publishes those for Las Vegas from its own daily snapshots, and they are printed under the market heading below. Read the direction rather than the level: all three moving together is a market changing, one of them moving is noise.

At the market, under it, or above it

Pricing at the market is the default and it is not a compromise: it puts the home in front of every buyer whose filter covers the price and lets the first two weeks do their job. Pricing slightly under the comps suits markets where inventory is short and days on market are low, because it invites more than one buyer and lets them compete; where inventory is rising it simply sells the home for less. Pricing above the comps to leave room to negotiate spends the fresh-listing window on buyers who never saw the listing.

There is one hard ceiling regardless. A financed buyer's lender will lend against the lower of the price and the appraised value, so a price agreed above what an appraisal supports has to be renegotiated, covered in cash by the buyer, or lost. That makes an aggressive price a problem twice: once with the buyers who filter it out, and again with the one who does not.

Questions people ask