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
Conifer wood, such as pine and redwood. ...
The time period a real estate investment is held. The return is tied to the time period of the investment. The period is used for income tax purpose to determine whether a profit earned or ...
Defect in the tax law that either may provide a loophole to minimize the tax payment or result in higher taxes than there should be. ...
The process of changing, updating, and altering the appearance and structural characteristics of a building. For example, John remodels the kitchen in his home by replacing the cabinets, ...
Limited partnership in which limited partners rely on the general partner to choose specific properties after the funds are available. ...
Claude in a contract, title, or mortgage that is subject to being annulled, repealed, or revoked upon the satisfaction of a claim or completion of a future event. ...
person's behavior partly genetic and partly learned through experience over time. Some people have good personal traits while others have poor ones. ...
Same as term government rectangular survey: Way in which the U.S. government uses to subdivide public land. Land is designated as either a base line (East-West) or principal meridian line ...
Initial user of real estate property, such as the first tenant in a newly constructed apartment building or office building ...
Have a question or comment?
We're here to help.