Asking Price
In real estate, asking price is referred to as the amount set by the seller, the amount he/she wants to receive for the purchase of their home by the buyer. The asking price isn’t always the same as the final price that is paid by the buyer, but it is the price that the seller initially sets, the price that can start a negotiation between the two parties.
Typically, the asking price is the lowest value a home seller will accept to sell the property. It is also called a listing price, and this is actually the amount the seller hopes to receive from the buyer during the transaction.
How does the market affect the asking price?
The seller needs to know the situation of the market when they determine the asking price as that will depend on the market conditions. Several factors can influence the asking price like the home’s age, the size of the property, features, upgrades, etc. It is also a good idea to look at similar recently sold homes in the area, and by contacting a real estate agent, the seller can ensure a competitive asking price for the property.
During a seller’s market, the home buyer’s offer is generally from the asked price up. The seller sets the asking price, and more buyers might be interested in the property. This can lead to a bidding war between buyers, which will increase the final price. The best offer usually wins. However, there are times, especially in a buyer's market, when a negotiation is done, and the house is sold below the original asking price. If there are fewer buyers interested in the property or only one, that buyer might also look at other properties. In this situation, the game is reversed, and the houses have to “give the better offer” sort of speak.
That’s why having a real estate agent with you when selling a home is so important. Getting the asking price the closest possible to the fair market value is a challenging and complicated task that homeowners hardly get right. A real estate agent is the most skilled and experienced person to do that job because they deal with asking prices of similar properties every day in their profession. They see how those prices do with home buyers, how much higher and lower from the asking price the fair market value strays.
Real Estate Tip:
Are you looking for more than a term definition? Check our Real Estate Questions page; one person’s question might contain the answer you need!
Popular Real Estate Terms
Classification of one's ownership rights in land. One way either buy the land and own all rights to it or lease it where one's rights are described in and limited by the lease agreement. ...
Purchase of part of property or property rights when condemnation takes place. The owner must be justly reimbursed. ...
A method of purchasing real estate whereby a maximum amount of leverage is used. Normally the seller will finance the down payment necessary to acquire a mortgage. Thus, the purchaser is ...
Single-family dwelling attached to other units by common walls. ...
Location Analysis is the appraisal of a general geographic area for a particular use. A Residential Real Estate Market professional (or consumer) rarely deals with a Location Analysis ...
Percentage of royalties derived from an oil and gas lease payable to someone other than the property lessor. It is a net royalty interest in the oil and gas recovered at the surface free of ...
Right of tenant to make use of a property's wood or food producing capacity to provide for his or her own necessities. ...
Contains the appliances necessary for the maintenance of an establishment. ...
Half oval window. It is usually small and placed over a doorway serving a decorative purpose. In some case, the window may be mounted with a hinge at either end to a permit opening for ...
Have a question or comment?
We're here to help.