People selling their homes often choose a price based on one of three factors: need, ego or greed.

Particularly in a tough real estate market like the one we're seeing in the United States now, sellers often want to price their homes according to how much they need to get out of the sale in order to purchase a new property.

Unfortunately, what a seller needs to make on a property has nothing to do with market conditions, which are generally governed by supply and demand, along with other economic factors. The same goes for sale prices that are dictated by ego or greed. Just because a neighbor's house sold for an attractive price doesn't mean yours should as well, unless your home truly is more valuable or market conditions have changed.

Every homeowner wants to receive as much money as possible from the sale of their home; however, it is important to not overprice a home. Doing so will turn off many potential buyers even if the seller is willing to come down significantly from the original asking price.

When putting a home on the market, it is a good idea to research the prices of comparable homes in similar locations and neighborhoods to get an idea of what a reasonable price is.