Early on, it will be important for you to determine what, exactly, you want out of the sale. When deciding on an asking price for your property, there are three basic metrics you must take into account: 1) the price you want to get; 2) the appraised value; 3) the market price.

The price you want to get: Obviously you will probably want this number to be higher than the price you originally paid for the property. Figure in how much you want to make on the investment and use that number to set a floor – the absolute lowest you’ll go.

The appraised value: You get this by securing the services of an appraisal company (See Chapter 18 Resource Section). The appraiser will take into account the quality of the construction, the size, the furnishings, and any improvements you’ve made to the property (remodeling the bathroom, landscaping, etc.) and quote you a price. Appraisals are an art, not a science, but at the very least the appraisal should give you an idea what prospective buyers will hear when they contract their own appraisals.

The market value: This is taken into account as a factor in the appraisal, but other factors – positive and negative – may affect the actual market value of your property. Supply-and-demand cycles, planned infrastructure development, or the unique style of your property compared to other offerings on the market may all affect the market value of your property more than standard appraisals take into account.

All three of these factors should be taken into account when you are deciding on an asking price. A high asking price might scare away potential buyers, but remember also that an asking price is merely a starting point for negotiation. The final price will probably be a bit lower than your initial asking price, so be sure your asking price is significantly higher than your floor, or the price you want to get. When setting your asking price, you should take into account the property’s rental value (if you’ve been renting it) quality of construction, and location. Of course you’ll also take into account what other similar properties in the area are selling for. Though you can do this yourself to a limited degree by looking through real estate listings in newspapers and on the Internet, this is also a good time to turn to a broker for advice.