When we prepare to list your home for sale, one of the most important steps we will work through together is determining the right list price. To do that, we will look closely at market data -- usually focusing on comparable home sales from the past six months or so.

Let's say we run that market analysis, and the data clearly points to a value of $500K for your home in the current market.  We conclude that your home is almost certainly worth $500K given recently sold homes that are similar to yours in size, location, condition, features, etc.

But then… just before we put your house on the market, something happens that causes us to pause and talk about pricing again.

Here are two events that could take place that would cause us to re-think our pricing...

1.  A very similar home is listed for $540,000 and goes under contract in two days.

2.  A less impressive home is listed for $500,000 and goes under contract in two days.

In either of these cases, it's reasonable to pause and reconsider our prior pricing plans.  It is quite possible that buyers will pay more for your home than we anticipated.

The Value of Recent (and Super Recent) Market Activity

While your original market analysis is still important, a brand-new listing that's under contract in 48 hours can be a very helpful data point. It may be worth considering whether we should adjust our planned list price upwards, even if just a bit, to reflect this most recent activity.

That said, there are two important caveats:

1.  We won't know the final sales price of that new comparable until it closes. It might have gone under contract at full price, above it, or even below --  but we won't know for sure until that properties makes it to closing.

2.  One data point doesn't make a trend. A single similar listing, even if it seems to point to a wonderful new market trajectory, likely isn't enough to guarantee that we will definitely sell your home at a higher price than our original market analysis indicated. We ought to weigh the new data point alongside other market indicators.

So, What Should We Do?

If there's a gap of time between when we do the initial market analysis and when your home actually goes on the market, we'll want to keep watching for similar homes to hit the market for sale.

We'll be watching for those new listings, their prices, and how quickly they go under contract right up to when we put your house on the market. This will allow us to make a final pricing decision that reflects both the broader market over the past six months and the most recent market activity.