Of all the things you do when selling your home, determining the list price is perhaps the most critical step in the process. Priced correctly, you will sell your house quickly and for the largest amount of money. Being priced either too high or too low can cost your thousands of dollars and a good deal of time and effort.

The key to determining the ideal list price for your property is to first understand what other similar houses are selling for (market value) because a prudent buyer will pay no more for a property than the cost of a similar and equally desirable property. An important thing to remember is that the list price of other houses has zero effect on market value. Many people make the mistake of thinking that just because the neighbors house is listed at $400,000, their "similar" house is worth $400,000 when in fact the neighbors house could be $30,000 overpriced. Only the "sold" price of a house is of any importance when determining market value.

Their are two easy ways to determine market value. The best way is to hire a professional property appraiser as they have had the most training in this specialized field. If you have a very unique property, this is the only option you should consider. The second way is to enlist the services of a Realtor. Most Realtors will provide a market value assessment free of charge. The level of training and experience varies greatly between Realtors, and if you obtain market value assessments from 3 different Realtors, there's a good chance you'll get 3 different answers. If you choose this method ask questions, make sure the Realtor can explain how they arrived at the given value and look at their data to make sure you understand it. Be sure to ask if the Realtor has had any specific property appraisal training. In Alberta, one way to be sure that a Realtor has had extra training in property appraisal is to look at the title on their business card. A higher level of property appraisal training is required to achieve licensing as a "Broker" or "Associate Broker" than is required to receive licensing as an "Agent".

Once you have a good idea as to the market value of  your home, you should list your home between 1% and 4% above this value depending on the level of competition in the market. The simple laws of supply and demand work in Real Estate as they do in everything else. If there are lots of other homes for sale in the area, stick close to the 1%. If there is an identical house for sale, be sure you're priced less than they are.

Be wary of the strategy of pricing too high at first "just in case" and bringing the price down if there is no sale after awhile. A property that has been on the market for too long tends to get stigmatized as buyers wonder "what's wrong with it?". This can often lead to lower offers than you would have received at the same price while it was a new listing.