Low mortgage rates are pushing home prices, but so is lack of inventory.
What is asking price?
The asking price is the amount a home seller wants a buyer to pay to purchase his home. The asking price is generally part of the property listing and is not the final price paid by the borrower.
Also called the list price, the asking price is the amount of money the home seller hopes to obtain from selling his or her home. The amount of the asking price depends on various factors, including market conditions.
When a homeowner hopes to sell his or her home, it is important for the property owner to determine the list price based on the current market conditions, the size and age of the home, key features or upgrades to the property, the borrower’s owed mortgage and anticipated profit, if any. Similar homes in the area are often a good starting point for determining the listing price.
Most homeowners will not receive the initial asking price as the final sale price. Negotiations and counteroffers between the buyer and seller will likely change this amount. The asking price can also change if the home seller does not receive offers on the property. This may require the seller to reduce the sale price.
Asking price example
Sam wants to list his home for sale. He talks to his real estate agent, who helps determine the value of the home based on current market conditions. They learn that a home just like Sam’s sold a month ago for $150,000. However, Sam’s home has a finished basement and additional features. Sam and the real estate agent agree to list the home for sale at $165,00. This is the asking price for the home.
When determining the value of a home to set a listing price, it’s important for home sellers to understand all the costs. Visit Bankrate.com to learn more about closing costs.