How Does a Real Estate Agent Determine the Selling Price of a Home?

Evaluating Property Value

A real estate agent uses several methods to determine the ideal listing price for a property. To determine the listing price for a property, the real estate agent checks what prices similar real estate in the same neighborhood recently sold for. They also may enlist the services of a real estate appraiser to evaluate the condition of the property and the value of the property. The real estate agent must also listen to the owner of the property regarding how much she wants to sell the property for.

Neighborhood Property Values

A real estate agent generally has a good idea about current property market values. He keeps track of the sales prices of current properties. When a real estate agent represents a seller, she looks at recent neighborhood sales prices. He compares properties that are of a similar size and in similar condition. Through looking at similar properties in the area and the prices that they sold for, he can estimate how much the property is worth and how much buyers are likely willing to pay for the property.

Real Estate Appraiser

A real estate agent may hire a real estate appraiser to evaluate a property to help determine the market value. The real estate appraiser will examine the lot the property is on, the condition of the property and the age of the structure, to determine the property's value.

The Owner

No matter what the real estate agent feels the property is worth, the listing price is ultimately up to the owner of the property. The real estate agent will talk to the owner of the property to help him determine the value of the property. If a property is listed at too high of a price, it will be hard to sell. Buyers will not want to overpay and lenders will not loan more for the property than it is worth. But in the end, it is up to the owner to make the final decision on the listing price.

Remodeling and Repairs

A real estate agent may advise the owner to perform minor remodeling and/or repairs to the property to increase the property's value. Sometimes minor inexpensive remodeling and repairs can significantly increase the value of a property.

Resources

• National Association of Realtors