Step 2: Use Comparable Houses to Set Your List Price
What is a "comp"?
The best source of pricing information comes from houses directly comparable to your own. In the real estate industry, a "comparable," or "comp," is a house with similar features, preferably located near yours. When identifying comps, look for houses with the same number of bedrooms, bathrooms, and other amenities.
Check current listings.
To get comps, visit open houses, read classified ads (in print and online), and check out websites containing real estate listings. Websites that publish the Multiple Listing Service (MLS) are particularly helpful, such as www.realtor.com, by the National Association of Realtors (NAR).
Review actual selling prices.
Of course, list prices don't tell you how much houses ultimately sold for -- that's the comparable data you really need. In a hot market, houses might go for well over list price, and vice versa. Do some research at websites that collect this data, such as Zillow or Trulia. This information will also help you decide which of the incoming purchase offers are realistic.
Do your own homework.
Don't wait for your real estate agent, if you work with one, to put a dollar figure on how much your house is worth. For one thing, less scrupulous agents may inflate their estimates to capture your business. More important, you want to be educated about your house's real value so you can work intelligently with your agent and make rational decisions when negotiating with buyers. Most agents will suggest a price range for you to work with, and it won't help if you simply choose the highest number in the range, without having done your own research first.