How to price your house to make a quick sale

Whatever your reason for selling, the key to selling your house within a reasonable amount of time could very well be the price tag you hang on it -- whether you're in a buyer's market or a seller's market, and whether you use an agent or sell it yourself.

"Setting the correct asking price is the most important step in the process of selling your home," said William Supple, author of "How to Sell Your Own Home" and publisher of "Picket Fences," a monthly magazine for homeowners.

Homes that are overpriced don't sell, Supple said. They scare away potential buyers.

"Home buyers look at houses in ranges," Supple explained. Set a price that's too high and they'll think that your house is too steep for their wallet and they won't even bother to take a look at it.

"Buyers are immersed in the market. They've seen lots of properties and probably know the reasonable price ranges for properties they are interested in."

So if your selling strategy is to set an unrealistically high price in hopes that someone will bite, rethink you strategy. "Homes that are overpriced will generate no offers, no negotiations, no sale," Supple said.

What it will do, however, is drive potential buyers into the arms of the competition -- other, similar houses that are on the market at more realistic prices, which means that your property could sit unsold for a long time. Homes that are on the market too long become "shopworn," leading agents and buyers to conclude that something must be wrong with the property.

Set your price too low, on the other hand, and you'll leave a pile of money on the table. But price it right and it should sell quickly regardless of market conditions. Who has not seen a TV ad featuring a couple boasting about how they sold their home in three days with the help of some for-sale-by-owner service? That may sound nice, but those are classic cases of homes that were underpriced.

So how can you figure out the right asking price? Fortunately there are resources available to you that will help you determine the fair market value -- the FMV -- for your home, which is what a buyer is willing to pay you -- the seller.

One of them is a comparative market analysis. It's a written analysis that compares your house to others like it in your area that sold recently or are on the market in your neighborhood.

A comparative market analysis will give you factual information about the houses: Number of bedrooms and baths, square footage, such amenities as fireplaces and swimming pools, as well as the listing prices and the sold prices. To get such an analysis, call a real estate agent, even if you plan to sell the home on your own. The agent will happily come to your home and generate a comparative market analysis and suggested listing price for you in the hope of getting the listing eventually.

"Homeowners don't spend enough time studying how to price their home," said Ilyce Glink, author of "50 Simple Steps You Can Take to Sell Your Home Faster and for More Money in Any Market." She recommends getting market analyses from three agents. Chances are they'll all be different, but they should fall within a range. Try to identify the real estate agents who do the most business in your neighborhood.

A comparative market analysis, however, is not the be-all and end-all in determining price.

It can be incomplete or too dated to reflect current market conditions and, of course, no two houses are ever exactly the same. Also, they don't take into account subjective factors such as curb appeal, an especially eye-pleasing view, or proximity to a bus stop, which explains why some experts recommend getting a professional appraisal as well as a comparative market analysis.

"Real estate agents are not professional real estate appraisers," Supple said. "Some will inflate the value of your home just to get the listing."

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