How Did You Come Up With This Price?
At my open house this weekend, a visitor asked me a question I love getting: "So, how did you land on this list price?"
It's a fair question — and honestly, one every seller should ask before signing a listing agreement.
Here's the truth: a list price is a hypothesis. It's the seller's (and their realtor's) best educated guess about what buyers in today's market will actually pay. The tricky part? We're building that hypothesis using past data, and the one person whose opinion matters most — the buyer — doesn't get a vote until the home is already live on the market. No pressure, right?
So how do I help my clients land on a number that actually works? Here's what goes into it.
1. What have similar homes nearby sold for in the last year?
I pull county records and compare homes with the same bedroom count, bathroom count, square footage, and parking situation. In neighborhoods where the same ten floor plans repeat block after block, this is refreshingly straightforward — if your neighbor's twin home sold for $600,000, you can reasonably expect something similar, assuming your home is in comparable (or better) condition.
But in older neighborhoods, where houses were built across different decades — or even different centuries — this gets more nuanced. A 1920s bungalow and a new-build next door with an open-concept kitchen are not the same product, even if the lot sizes match.
2. Are prices rising, falling, or holding steady?
If prices have climbed over the past 12 months and mortgage rates haven't moved much, I'll usually recommend pricing a bit above recent sales. If prices are softening or rates are climbing, I'll suggest pricing at or below the neighbors. The market doesn't care what we wish it would do — only what it's actually doing.
3. How does this home compare in condition?
Buyers want as little maintenance as possible — understandably, since they're already emptying their savings account for the down payment. I look closely at:
Age and condition of the floor plan and layout
Size of bedrooms and bathrooms
Age of mechanicals (furnace, water heater, HVAC)
Age of the roof and sewer line
Here's some good news for owners of older homes: age isn't a dealbreaker. A well-maintained older home with a newer roof, updated systems, and a tasteful interior can easily out-price a newer home that's been neglected. Buyers aren't just buying square footage — they're buying peace of mind.
4. What's each feature actually worth?
This varies more than people expect. In some neighborhoods, a deeded parking space can add $25,000 to a home's value. In others, where street parking is plentiful, it barely moves the needle. And in neighborhoods where every home has a garage, a home without one can take a real hit in perceived value — even if the house itself is beautiful.
5. Are there any encumbrances attached to the property?
Solar panels are the big one here. They're great for the planet and great for utility bills — but if they're leased rather than owned, that lease doesn't disappear at closing. It transfers to the buyer, and that's a detail that absolutely factors into pricing conversations.
6. What's happening with mortgage rates?
I touched on this above, but it's worth repeating: rates drive monthly payments, and monthly payments drive what buyers can actually afford — regardless of what the price tag says. Rising rates generally call for more conservative pricing. Falling rates can support pricing a bit more aggressively.
So, how do you know if the price was right?
You listen to what the market tells you.
If offers come flooding in within days, you probably priced a little low — congratulations, and also, oops. If the home sits well past the median days on market for your area with no offers in hand, that's the market's polite way of saying "try again." Either way, the market always has the final word — we're just the ones doing the translating.
Thinking about listing your home in the Denver metro area and want a second opinion on pricing? I'd love to walk through the numbers with you.
