Ask a REALTOR®: How to Set Your Home’s Sale Price

We chatted with Wahi REALTOR® Faraz Azam to learn the ins and outs of how to set your home’s sale price when you’re planning to put it on the market.  

By Josh Sherman | 2 minute read

There are lots of factors to consider when setting your home’s sale price, but a knowledgeable Realtor can help.

In expensive housing markets in places like southern Ontario and B.C.’s Lower Mainland, it’s literally a million-dollar question: how do you set your home’s sale price?

For sellers, their home is likely their biggest investment. Understandably, they want to attract the highest bids. Setting the right list price is a key part of a winning strategy.

Whether it’s your first time listing a home for sale, or you could use a refresher, we turned to Wahi Realtor Faraz Azam for advice on how to set a list price. Like all of Wahi’s in-house Realtors, Azam has more than 10 years of experience in the industry. “My favorite part is helping clients find their perfect home,” says Azam. “It’s rewarding to see people light up when they realize this is the one.”

What’s the first step to set your home’s sale price? 

Most people who are selling a home are planning to use the proceeds to buy their next home. In this case, the first thing to do is figure out your budget. How much do you need your home to sell for so that you can afford your next home? If you’ve got a mortgage, speak to your lender to figure out how much equity you’ve built up. A mortgage broker can help you run the numbers.

Once you know your budget, what’s next? 

To set your home’s sale price, you’ll want to work with a Realtor who truly understands home sales data and is constantly engaging with it. Wahi Realtors use data-driven insights to determine price your home, and Wahi also empowers homebuyers with a variety of tools such as the Home Value Estimator and Market Pulse, which compares recent list and sold prices at the neighbourhood level. Harnessing data is important because after your budget, comparative market analysis should determine your list price.

Comparative market analysis doesn’t just mean comparing what other homes in your neighbourhood have been listed and sold for. It involves looking at homes with similar characteristics as your own. For instance, two condos in the same development could be valued very differently if one was completed several years earlier during the first phase of construction. Two houses on the same street could be valued differently if one backs onto railroad tracks and the other a park. Age, finishes, exact location, amenities — we consider many factors when looking at comparables.

Does the time of year influence the list price at all? 

Seasonality is a factor. Spring and fall are typically the busiest times of year when you’re likely to attract more bids, but overall market conditions matter. If it’s a slow year for real estate, you won’t necessarily be able to list more aggressively in the spring and fall markets. Also consider that if you sell during a period of strong demand, you’ll also be competing against more homebuyers when you’re on your own house hunt.

What’s the biggest mistake sellers make when it comes to list prices? 

A lack of flexibility. Sellers need to realize from the very beginning that even after they’ve agreed with their Realtor on the list price, it isn’t set in stone. If you’re committed to selling, you need to be open to the idea of relisting at a different price.

Sometimes, the market is just quiet, and in these cases the fact that your home isn’t selling may have nothing to do with the list price. But if you aren’t getting any showings and comparable homes in your neighbourhood are selling, it’s probably time to reevaluate the list price.

There’s a common strategy employed by some Realtors to list your home for less than you think it’s worth to try and stir up a bidding war. Is this a good idea? 

It depends. It really comes down to the location and, of course, market conditions. In some places, this is the norm. We’ve seen this in parts of Brampton and Markham, for example. The strategy can backfire, though. You do run the risk of listing below market value and not attracting any bids, but this could happen with a totally reasonable list price, too.

Any other advice for sellers on how to set a home’s sale price?

Don’t try to time the market. In the past five years, we’ve seen completely unpredictable events, including a global pandemic with lockdowns, a period of generationally high interest rates, and now a trade war with the U.S. Who knows what’s next? I’ve seen many sellers turn down totally reasonable offers and regret it later.