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What Is The Asking Price On A House?

4-Minute Read
Published on September 27, 2022

When you’re getting ready to sell your home, you want to ensure you choose the asking price. Setting the right asking price will make your home more appealing to the maximum number of buyers possible. This article will define asking price and explain how you can determine a reasonable asking price when it’s time to sell your home.

What Is Asking Price?

The asking price – also referred to as a listing price – is the amount of money a seller would like to receive for their home. The seller and their real estate agent come up with the asking price as a starting point for potential buyers. 

It’s important to understand that the asking price isn’t necessarily the amount the seller will receive for the property. The buyer and seller will negotiate to come up with the final selling price.

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What’s The Difference Between Asking Price Vs. Selling Price?

The asking price is the amount the home is listed for, while the selling price is how much the property actually sells for. These two numbers could be the same, but in most cases, they are different.

For instance, if the seller is listing the home in a seller’s market, the selling price may be higher than the asking price. If the property is in high demand and the seller can get a bidding war going, this will drive up the final cost of the home.

However, if the seller is operating in a buyer’s market, the selling price could be lower than the asking price. Since fewer buyers are looking for homes, the seller doesn’t have as much leverage to negotiate for a higher price.

How To Set The Asking Price On Your Home

There is an art to determining the asking price of a house you’re selling. If you set the asking price too high, you may have fewer interested buyers, and the house could stay on the market longer. Here are a few steps you can take to determine the asking price.

Consult With A Listing Agent

A listing agent, also called a seller’s agent, is a real estate professional representing the seller in a real estate transaction. Your listing agent has access to market data and real estate experience, so you should ask for their professional advice when setting the asking price.

Get A Home Appraisal

During a home appraisal, a professional appraiser will determine the fair market value of your home. Appraisers determine the fair market value based on the age and condition of the house, any upgrades you’ve made to the property, and how it compares to similar properties in the area.

Since an appraisal is an unbiased look at your home, it can be a helpful factor in determining the asking price when you’re getting ready to sell.

Assess Current Market Conditions

The current real estate market conditions can also help you determine the asking price of your property. For instance, if the economy is strong and there’s a high demand from potential buyers, you’ll be able to set a higher asking price.

Review Real Estate Comps

Real estate comps are recently sold homes that are similar to the property you’re trying to sell. Seeing what comparable properties in your area recently sold for can help you decide how much to list your house for when it comes time to sell.

Finish Home Improvements And Renovations

Potential buyers want to purchase a home that’s as move-in ready as possible. So if you have any uncompleted home improvement projects, finishing these can increase the value of your home.

Additional home improvements can also help you increase the asking price on your property. For instance, if your house is mainly carpeted and you replace them with hardwood floors, this will increase the value of your home.

Prepare To Negotiate

Depending on the market conditions, you should be prepared for potential buyers to negotiate the home’s asking price. The best way to prepare for the negotiation process is by working with a great real estate agent. An experienced listing agent will know a good offer when they see one and can recommend when you should ask for more money.

How Much Above Or Below Asking Price Should You Offer As A Buyer?

If you’re a potential home buyer, you may wonder how much above or below the asking price you should offer on a house you’re interested in. The offer price will vary depending on the real estate market you’re in.

For instance, it’s hard to offer less than the asking price in a seller’s market. You’ll likely be outbid by another buyer, and the seller may not even consider your offer.

If you’re in a buyer’s market, you have more room to negotiate, but you should still tread lightly. If you make a bid that’s too far below the asking price, you risk offending the seller.

You should ask for your real estate agent’s guidance when making an offer on a house. And you should also consider how badly you want that house. If you want to make sure your bid is accepted, offering a little bit more may be worth it.

The Bottom Line

The asking price is the amount a seller would like to receive for the property they’re listing. As a seller, you should work with your listing agent to determine the asking price for your home when it’s time to sell. It’s also a good idea to learn how to buy and sell a house at the same time.

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Jamie Johnson

Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.