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Spring House Hunt: A guide to real estate pricing terms | Boston.com

What is my home worth? It sounds like a simple question, but the answer can vary greatly, depending on why and whom you are asking. Are you selling your home and wondering what your listing price should be, or are you referring to the assessed or appraised values of your home?

Words like “assessment’’ and “appraisal’’ are often tossed around interchangeably and frequently misused. Additionally, the listing price is not necessarily the price a seller should expect to receive when his or her home is sold, as many would think. If you are wondering what your home is worth, you should understand what all of these terms mean, as well as how they are actually determined.

Listing price
The listing price is the price the sellers chose to list their homes for when they put them on the market. Determining the right listing price involves homework and strategy. That’s where your agent comes in. Agents begin by preparing a Comparative Market Analysis (CMA) for their clients. We do this by researching and comparing recently sold, similar properties found on the Multiple Listing Service and adjusting for features and benefits. Once we arrive at a range that we believe a home will probably sell for, we discuss our findings with the sellers, who ultimately decide the actual listing price for their home. This price may be adjusted while a home is on the market if it’s not getting enough activity.

A seller may ultimately choose a listing price below the expected sale price of the home. This is where pricing strategy comes in. For example, if we suggest a range between $499,000 and $529,000, the seller may decide to price on the low end to generate more interest and bring in more potential buyers with the intention of having the price bid up above the range. This happens quite frequently in a seller’s market, with low inventory and high demand. Sellers need to understand this process, because if they set the price too high, their home will linger on the market, possibly even selling below the lowest suggested price.

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Spring House Hunt: A guide to real estate pricing terms.