When it comes time to finalize a list price for your home, things aren't always black and white.

Let's say we take a close look at the market -- analyzing recent sales, currently competing listings, and overall market conditions --  and it points us to a price of around $400,000. 

But something about your house, the neighborhood, this particular price range, or inventory levels over time gives us a feeling that $425,000 might be within reach.

Now we have a decision to make:

Do we price your home based strictly on the comps and expect strong interest based on how it compares to similar homes?

Do we price it based on our gut, aiming a bit higher in hopes of finding that one buyer willing to stretch.

Different sellers make different decisions, and both approaches can work -- or miss the mark -- in different ways.

Interestingly, here's what can sometimes happen:

If we price based on the comps, we might see strong early interest -- even multiple offers -- which can drive the price up toward (or to, or even above) that higher gut-level price.

If we price based on the gut, we might not see as much early activity, and we could end up negotiating back down toward what the comps originally suggested.

Pricing strategy is more clear cut with some houses, price ranges and neighborhoods than others.  While we will always start with the data, we sometimes have to factor in our gut feeling about pricing as well.

In the end, the right pricing often depends on your goals as a seller and how much risk you are comfortable with or how much certainty you prefer.