A $250,000 home is priced 10% below the true market value at $225,000. The home sells quickly with little or no negotiation for possibly an all cash offer to close quickly. This buyer maybe an investor who is extremely market savvy or a buyer who works closely with a Real Estate Agent using cutting edge buyer programs. This buyer probably has a VIP Buyer Agreement with his agent and receives emails daily with all the new listings as they come on the market. Both of these buyers are able to act before most other buyers even know the home is for sale, they know the area and the pricing. The seller leaves $25,000 on the table and doesn’t know it until it’s too late.

Don’t rely too heavily on what neighbors tell you in social situations about the sale of their own and/or other properties in your neighborhood. Listen, of course, but be aware that they often just know the original asking price and the fact that there’s a buyer in the picture. They don’t know that the asking price was lowered because of the condition of the house, a redecorating allowance was given, etc.

Don’t talk to a neighbor and then think, “Well, that house sold for $X, my house is in much better condition; therefore, I should be able to get $X + $Y.” Maybe so. Maybe not. Base your pricing decisions on the most solid information available to you, not neighborhood gossip.

If you base your pricing decisions on solid information and use good common sense, you should get a good result. In this case, a good result means a quick sale!

Here are some important things to keep in mind about pricing:

Realistic pricing achieves the maximum price in a reasonable time.
Generally, the price should not exceed your home's value by more than 5%.
Houses that remain on the market a long time do not get shown.
The cost of your home or the profit you desire is irrelevant; the market determines the price.
Major home improvement almost always cost more than the added value.
A house that is priced right from the beginning achieves the highest proceeds.

tips for pricing your home

competition.
How many other houses are for sale in your area? Are you competing against new homes?

comparables.
What have other homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities

Get an appraisal.
For a few hundred dollars, a qualified appraiser can give you an estimate of your home's value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.AppraisalInstitute.org) or ask a REALTOR® for some recommendations.

customer can ask a lender.
Since most buyers will need a mortgage, it's important that a home's sale price be in line with a lender's estimate of its value.

You can be accurate by this.
Studies show that homes priced higher than 3 percent over the correct price take longer to sell.

Pricing a home properly is the biggest problem home sellers, who choose to sell their property by themselves, encounter. They either set a price that is way below the market value or way above it. Either way, this proves detrimental to the seller

So Your's Goal is:-

Market price is nearly always a range of prices -- high, medium, and low -- not an exact price. You want to price yourself near the top of the market price range for your property. That way, you’ll have flexibility to negotiate price if need be.

The only exception to the above scenario is if you’re in a hurry to sell your property. In that situation, you should price yourself near the lower end of the market price range. Even if forced to do this, make sure you leave some wiggle room to negotiate with a buyer. Buyers will always assume the listed price is negotiable.

How to price your house
Abandon your personal point of view. How much will a ready, willing and able buyer be willing to pay for your home? Buyers don't care how much you paid for the home, how many memorable moments you and your family shared in the home, how much cash you need for the down-payment on your next home or how much time and money you've invested in your home's hardwood floors, fresh paint, lush landscaping or other improvements.

The Market
This approach is based on the premise that a prudent person will pay no more for a property than it would cost to purchase a comparable substitute.

Pricing your home effectively
Do not over price your home. Over-pricing when you sell a home reduces buyer interest, makes competing homes look like better values, and can lead to mortgage rejections once the appraisal is in. Over-pricing when selling a home is the single biggest reason why many "for sale by owner" home sellers don't sell their homes successfully. Remember: the home selling market dictates the price (not what you think it should be worth).

One of the best ways to correctly price your house when selling is to find out how much other homes, similar to your own, recently sold for in your neighborhood. Talk to home sellers, buyers and check out the real estate listings in your local newspaper.

Typically, if you set the price of your home at 5 to 10 percent above the market price, you are likely to end up with an offer close to your home's true value. Also, you may try calculating the cost per square foot of your home compared to the house selling prices in your area (divide list price by square footage of livable space). If your house has more features or other desirable qualities, you may want to set a slightly higher house selling price.

If you want to sell quickly, your home should probably be listed on the lower end of the price range we determine. On the other hand, you may be in no hurry and more interested in obtaining maximum equity from the sale. In that case, the higher end of the price range may be more to your satisfaction. But remember that ultimately, it is the buyer who will determine the price.

The Benefits of Pricing Right
Your property sells faster because it is exposed to more qualified buyers
Your home doesn't lose its "marketability"
The closer to market value, the higher the offers
A well-priced property can generate competing offers
Other Agents will be enthusiastic about presenting your property to buyers
More money into your pockets...faster