When I sit down with a home seller, one of the most common things I hear is:
“The house two blocks away with a pool is listed higher than ours—why can’t we list ours like that? We have a pool too.”
I completely understand where that thought comes from. Most homeowners naturally look at other homes for sale in their neighborhood and try to judge their own home’s value based on those listings. But here’s the truth: that’s not how real estate pricing works.
How Real Estate Agents Determine Home Value
As a real estate professional, I don’t just look at what’s listed—I look at what’s actually sold. When I prepare a Comparative Market Analysis (CMA), I pull data from homes that have sold in the last 3–6 months. That’s what determines market value.
A CMA compares:
-
Bedrooms to bedrooms
-
Bathrooms to bathrooms
-
Pool to pool
-
Square footage to square footage
-
Upgrades and condition
This process ensures we’re comparing apples to apples—not just guessing based on what another seller hopes to get.
Why Sold Homes Matter More Than Active Listings
Here’s where it really matters: the appraisal.
When a buyer makes an offer on your home, especially if they’re using financing, the lender requires an appraiser to confirm the value. And what do appraisers look at? Sold listings—not active ones.
That means it doesn’t matter if a home down the street is listed $50,000 higher than market value. If buyers can’t get it to appraise, it won’t close at that number.
The Risk of Overpricing Your Home
It’s tempting to start high and “see what happens.” But in real estate, pricing your home correctly from the start is critical. Overpricing can lead to:
-
Fewer showings
-
Longer days on market
-
Price reductions later (which signal to buyers that something may be wrong)
-
Ultimately, a lower final sales price
Correct pricing—based on sold homes, not listed homes—positions your property to attract serious buyers quickly and generate stronger offers.
Final Thoughts
If you’re thinking about selling your home, remember this: buyers and appraisers set the market, not the neighbor two blocks away. A well-priced home sells faster, with less stress, and often for more money in the end.
That’s why working with a knowledgeable real estate agent who understands pricing strategy is key.
