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Are you thinking about selling your home or vacation property? What is the right price can be a very tricky question. We all want to have a successful transaction, that earns the most money for our seller, takes the least amount of time and has few inconveniences.

Price it too high and not enough buyers will see that your property is even for sale. You might say “I am leaving room for negotiation.” But setting a price that is even 10% over fair market value means 30% fewer potential buyerswill even look at your home on the Internet. That will get you fewer offers, decreased activity and potentially lower net proceeds. On the flip side, you don’t want to price it too low and leave hard earned money behind.So where does this leave us? A little research will gives us the answer? First let’s look at factors that don’t influence the price you are going to set for your home.

The price you paid for it. It doesn’t matter if it was 3 months, 3 years or 30 years, the price you paid for it has little relation to its price today. It is what the market will bear today.

The improvements you made. You can expect that replacing a roof, updating a kitchen or adding another bath will increase the price of your property over what it would have been before these improvements. You might just be bringing the property “up” to current fair market value for other similar homes. Keep in mind that one man’s treasure is another man’s trash. What is gorgeous to you may be in poor taste to the next person.

How much money you need. The market is unforgiving in what it will and will not accept. It cannot be reasoned with. All it knows is what a current buyer is willing to buy at. You may have already spent the equity in your property by taking money out through re-financing. You may have already spent future profits from the property through re-financing. You may need to look seriously at whether or not you can afford to sell at this time. But if you are in a position where you have to sell for any reason - relocation, divorce, death - you must be strong and look at what the market is saying today.

What your neighbor sold for. Although this is a good indicator of what your home may be worth, it is not the only factor in pricing. When did it sell for that price? 1 month, 6 months, 2 years ago? Did the neighbor make any concessions to the buyer? What were the terms of the contract? Is the condition of your neighbor’s house exactly the same as yours?

So what can influence price?The housing market fluctuates to the universal principle of supply and demand. Lots of houses + fewer qualified buyers = Longer marketing time + Lower values. Or Fewer available houses + more qualified buyers = Shorter marketing time + increased prices. So types of financing available is the crucial factor affecting buyers. How many buyers are qualified for financing. What types of incentive programs are available. The current tax credit has been very beneficial in bringing buyers into the market.

So where does this leave you when pricing?In general the best indication of price is what comparable properties have recently sold for and are currently selling for. You have to look at what is currently on the market to gauge your competition. You want to be selling your property not the one down the street. Overpricing your property will just make your competition look good. You need to evaluatue your home to others on the market based on simple factors. How many bedrooms? bath? total square footage? garage? lot size? type? Ask your real estate professional to create a Comparable Market Analysis (CMA) with information on properties currently on the market, under contract and recently sold.

The right price on a property results in more interest from real estate professionals, greater exposure and increased buyer activity. So set a price that reflects current fair market value and you will be rewarded with a faster sale, higher net proceeds and the fewest inconveniences. Who knows you might even trigger multiple offers!