To set the right price on a home, you should combine an objective evaluation of your property with a realistic assessment of market conditions.

In good markets and bad, you are more likely to benefit by determining a fair value than you are by asking an unrealistic figure and hoping for a lower offer that's close to what you wanted to get anyway. Setting the right price from the outset is the best strategy, allowing for a little room to negotiate. You could set a fair price and then refuse to bargain. But that would deter all those people who hate to pay full price for anything and like to feel they're "getting a deal.".

There are time when you may be able to advertise a house for more than its worth, but this is only true if you are willing to wait, sometimes months before it sells. If you do list it high, then understand at what point you will lower the price. Sometimes this strategy nets a higher price from an anxious or very serious buyer, especially in a hot market, but routinely it just means that your house sits on the market longer until you eventually lower the price to what it should have been.

If you are planning on buying another house with your proceeds, consider the costs of a delay in selling your current house. It won't be worth trying to get an extra $5,000 if your new house goes up this much, or potentially even more, while you are waiting to sell it.

Study the sale prices of similar houses
Investigate the houses that are on the market in your area. Whether you are using an agent or not, learn the offering and selling prices of similar properties. Find out how long each took to sell. To be comparable, a house that sold has to be close to yours in age, style, size, condition and location. You should also know the terms under which a house was sold. Try to find at least three similar sales in the past six months.

If you are listing your home with an agent, this kind of market research should be prepared and presented to you.

Get an appraisal?
If your idea of what your property is worth and the listing broker's recommendation don't coincide, an appraisal may be in order. An appraisal is an especially good idea if you are attempting to sell your home yourself.