Mr./Ms. Seller, this is how we do it in Santa Cruz.
I know this is way too much information for some Sellers, however, with a changing market, and more educated Buyers and Sellers due to the internet, I have found that explaining HOW and WHY I came up with the List Price is very much appreciated. (Disclaimer: This is a much abbreviated version of what I truly do.)
When a REALTOR suggests a LIST PRICE, we have to consider two things: 1. What buyers are willing to pay for the house, and 2. What the appraiser will value the house.
I personally start with homes that I think an appraiser will use in the appraisal. I find homes that are as close to the "subject property" (a.k.a. Your House). I consider age of home, square feet, lot size, location, and any special features. As you know, we can sell a house at any price, but unless the appraiser says the value is there, a lender will not lend on that amount. So we must be realistic.
Sometimes there is a HUGE discrepancy in the homes that are currently ACTIVE on the market, and those that have SOLD - with the same criteria. Yes, it may be a tough pill to swallow, but wisdom at the beginning of the listing will reap great rewards later.
Next, I think like a buyer. If a buyer qualifies for a home up to $XXX,000 what would that buyer look at? And how does the "subject property" compare?
This essentially is the competition. As you look at the competition, you usually get an idea of how your home compares to the competition. I have found this to be an invaluable tool. The lower you go, the quicker the sale.
Now the interest rates have been increasing. Many Buyers don't realize how much a rate increase affects their payment. The higher the price and interest rate, the number of Buyers that can actually qualify for the house is decreased.
One thing I tell Sellers often - it is very hard to underprice a home, especially during a selling season. Buyers have seen what is on the market and they will know when a good deal comes up. If it is a GREAT deal, there most likely will be multiple offers which will increase the sales price.
We have July and August for the big push for Buyers. Hopefully, the increase in interest rates will get Buyers to act now.
I hope this helps a bit.