A real estate agent does not pull a purchase price out of thin air. They will look at many different factors when coming up with a price to list your home at. If you have never sold your home before, you may wonder what factors an agent uses to determine the pricing for your home. Here are a few of the factors that they look at.
Recent Comparable Home Sales in Your Area
One of the factors that a real estate agent will look at when pricing your home is recent comparable home sales in your area. An agent will try to find homes in your area that are the same make and model of your home. If they cannot do that, they will look at other models, just to get an average price per square foot. A real estate agent will also try to look at comparable sales types. For example, they may exclude short sales and foreclosures, as the terms associated with purchasing these homes differ from a regular sale, which is why they tend to sell for less money.
The Condition of Your Home
Once a real estate agent has a rough baseline for what comparable homes in your area have sold for, they will assess the condition of your home, including what upgrades or modifications you may have made. If you have completed renovations or have upgrades in your home, your home may be worth more than comparable homes in your area. If your home is in need of upgrades, it may be worth a bit less. The condition of your home affects your home's value, as does what buyers in the specific neighborhood your home is located in are looking for.
Supply and Demand
Finally, supply and demand can have a major influence on the pricing of your home. If demand for homes in your area is high and there is not enough supply to match the demand, you may be able to get more for your home than you would if there were too much supply and not enough demand. The current state of your real estate market can affect your home's pricing.
A real estate agent should do a lot of research before coming up with a price to list your home at. If you are thinking about putting your home up for sale, talking to different real estate agents and asking them what they would list your home at can help you determine a fair price to start your home at and give you insight into which agent you may wish to list your home with.