Setting a price could be the most important decision a seller makes. Getting it right is no easy task, particularly in a changing market. But getting it wrong could sink your sales campaign. It’s time for some expert advice.

HOW much is my home worth? It’s the first question most homeowners ask their real estate agent when they decide to sell.

While size, quality and presentation all have a bearing on a property’s value, local market conditions are the key to setting an accurate asking price.

And right now, with growing demand from buyers outweighing the supply of homes for sale across Knox, understanding the local market has never been more important.

KR Peters director Peter Nicolls says a good agent will guide a seller through complexities and rapid changes in the market.

“It’s important that your agent has their finger on the pulse and is aware of the activities and demand in the local market,” he says.

KR Peters senior sales consultant Janine Scott-Rule says agents are required to consider three recent sales of similar properties to set a price guide.

While a good guide, using recent sales to set a price has its challenges in a market where robust buyer demand is fuelling price rises.

She says a growing sense of urgency among buyers in Knox is producing multiple offers and a rush to inspect homes - and ultimately pushing prices higher.

Ms Scott-Rule says a prospective buyer called within hours of the four-bedroom house at 4 Newcombe Court, Wantirna South, hitting the market, hoping to arrange an inspection the next morning before anyone else had the chance to see it.

“All of a sudden there’s the fear of missing out and they don’t want to miss out,” she says.

Mr Nicolls says banks and other lenders also use recent sales of similar homes to assess value and how much they will lend a buyer to purchase a particular property.

But with the market rising in the wake of the federal election, interest rate cuts and the easing of lending restrictions, the recent sales being examined are often lower than the sales today’s buyers are hoping to secure.

“This is the most difficult thing we are experiencing in the market at the moment,” he says.

“Until the sales we’re seeing today are settled in three or four months time, the valuers won’t use those sales.”

And some buyers, particularly those who rely on a small deposit and a large proportion of borrowings, will get caught short when lenders refuse to loan them enough to cover the sale price.

Mr Nicolls urged sellers to be wary of unusually high offers in this climate.

“They need to understand that if three offers are presented to them and one is significantly more than the others and that buyer is having to borrow 90 per cent of their money, then that’s not going to go through,” he warns.

Mr Nicolls says it’s frustrating, inconvenient and costly for a seller when a sale falls over due to a buyer’s finance, which is another reason to engage a trusted and experienced real estate agent.

He says as well as negotiating market intricacies on behalf of a seller, a thorough property inspection to identify and address any problems is also essential. Presentation is another key, with furniture often brought in to stage and showcase a home in its best light.

“We do whatever it takes to make that property sparkle,” he says.

“And when we go to the market we will be basing our price on the most recent sales that have taken place in that neighbourhood and try to compare apples for apples.

“At the end of the day a home is only worth what someone is prepared to pay for it. But if you have the right agent who has superior negotiation skills, understands the selling process and knows the local market, that dramatically increases your chances of achieving the best possible sale price.”