How Do Real Estate Agents Decide What To List A House For?

Picking a list price feels like the biggest decision in the whole sale, and most sellers don’t know how it gets made. You hear one price from a neighbor, another from a website, and a third from an agent who wants the listing. It’s hard to know who to believe.

The good news is that a list price isn’t a guess. There’s a method behind it, and once you see it, you can check anyone’s work, including mine.

What Goes Into A Listing Price?

Four kinds of homes go into the comparison. I look at all four, because each one tells me something different.

• Recent sales nearby. Homes like yours that closed recently, close by: similar size, bedrooms and bathrooms, lot, age and condition. These show what buyers paid.
• Pending sales. Homes in escrow right now. The final price isn’t public until they close, but they show what buyers are agreeing to today.
• Active listings. Your competition. Buyers tour these the same weekend they tour yours, so your home gets judged next to them.
• Homes that didn’t sell. Listings that expired or were pulled. They often show where the price went past what buyers would pay.

No two homes match exactly, so each comparison gets adjusted. A remodeled kitchen, an extra bathroom, a bigger lot or a busier street all move the value up or down.

Why Condition And Prep Change The Range

Two houses on the same Burbank street can sell at prices that are far apart because of what’s inside them. One has the original kitchen and worn floors. The other was updated and shows clean. Buyers pay for what they see and what they won’t have to fix.

That’s why I don’t give one price. I show you what your home is worth today and what it could be worth with the right prep before you list, across a few levels: as-is, a few light touches, and fully updated. I call that the EPIC® Report. It’s the first thing we do in Discovery, the first step of The Show-Ready-Seller® System.

Seeing the range by prep level lets you decide what’s worth doing. If the fix and skip list is your next question, I wrote about what not to fix when selling a house.

How The List Price Gets Picked Inside The Range

Once the range is set, the list price is a strategy call.

Most buyer attention happens in the first couple of weeks a home is on the market. Buyers with saved searches see it right away, and agents bring their clients to the new listings first. If the price is above what the recent sales support, those buyers look, compare and move on to the next house.

I’d rather list inside a realistic range and give buyers a reason to compete than list high and hope someone talks themselves into it. That’s my opinion, not a guarantee. The market decides the final price. The list price decides how many buyers show up to make an offer.

Why Two Agents Can Give You Different Prices

It happens all the time. One agent picks sales from a few blocks away, another reaches across town. One adjusts a lot for your updated kitchen, another barely does.

Ask every agent the same thing: “Which sales did you use, and why?” A good answer names specific homes and explains the adjustments. A price set high to win your listing is the most expensive one you can pick, because it usually ends in a price cut.

Online estimates add a third opinion, and they often disagree with each other too. I explained why in why Zillow, Redfin and Realtor.com show different values for your home.

How I Build A Range For A Burbank Home

Here’s the plan in three steps:

1. See the home in person. Condition, layout, light, the lot and the street don’t show up in public records.
2. Pull the sales and the competition. Recent sales, pending sales, active listings and homes that didn’t sell, adjusted for the differences.
3. Show you the range by prep level and recommend a list price. You see what each level of prep could mean for the price, and I tell you what I’d do if it were my house.

What Happens If The Price Is Off

Price too high, and the home can sit while buyers watch it get older on the market. Then the price cuts start, and buyers wonder what’s wrong with it. Price too low without a plan, and you can leave money on the table.

A price built from real sales, with a plan behind it, avoids both. You know why the price is what it is, and you go into offers with confidence instead of doubt.

See The Whole Plan Before You List

Pricing is one step of five. If you want to see how the price, the prep, the marketing, the offers and escrow fit together, request the free How To Sell Your Home Guide. If you’d like to see the range for your own home, request your EPIC® Report here.

Frequently Asked Questions

Should I list my house higher to leave room to negotiate?

I wouldn't. Buyers and their agents compare your home to recent sales, so a price well above them usually means fewer showings and a price cut later. I'd rather list inside a realistic range and give buyers a reason to compete.

Is the list price the same as what my home is worth?

Not exactly. The list price is a decision about how to launch the home. What the home is worth in today's market shows up in the offers buyers make and, when the buyer has a loan, in the appraisal.

Why did two agents give me different prices for the same house?

They likely picked different sales to compare against or adjusted for condition differently. Ask each agent to show you the sales they used and why. If one price is far above the sales, ask what it's based on.

Free Guide

How To Sell Your Home Guide

This guide comes from what I've learned selling homes in Burbank and the San Fernando Valley since 2015, not from general advice written for every market in the country. It shows you the steps I'd take on your home, so you know what to do before you spend money or sign anything.

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