There are a ton of variables that determine what your home is actually worth, but as a Realtor, I focus on four primary factors when evaluating a listing price.
"Location, location, location" is an adage that you see real estate agents on TV spout when they tell you why a home is so great. Personally, I shudder when I hear it, but it is the most important single factor because it's the one thing you can't change (well...you can. But it costs A LOT to pick up and move a house).
This is a simple one to explain. A home in a neighborhood with job opportunities and lots of amenities like schools, parks, and retail is going to sell for more than an identical home in a remote neighborhood or in a community where the main employer just went under.
This is an obvious one. The larger the house and the more land that comes with it, the more valuable it is compared to a house in the same condition in the same neighborhood. More house and a bigger lot = more money. Less house = less money.
When I mean "condition," I don't just mean whether home has a new roof or granite countertops. Condition also is a factor for showings. If you're selling your home, you need to remove your personal tastes as much as possible from the property and treat it like you are marketing a product. Declutter as much as possible. Pack up the knick-knacks and the family photos. That deep purple accent wall you love in the dining room? Paint over it in a neutral color.
The goal is to allow every potential buyer to imagine themselves living in the house, and that's hard to do if they can only see you.
There are several factors that affect demand. Local/national economy is a factor we're all too familiar with - no one wanted to buy a home around 2008, because they weren't sure if they'd be able to afford it, and home prices suffered (and are just now recovering to their pre-recession levels).
Another large factor is the time of year. Spring is when everyone crawls out of hibernation and starts looking for houses. All that competition drives up prices due to demand, so if you want to get the most from your home, list in the spring when everyone is looking.
Another aspect that most people don't consider when they self-price their home is "how much is that other house down the street going for?" That's your competition. If the home is like yours your price shouldn't be too far off if you're serious about selling.
What doesn't affect the price.
What you paid for it or what you put into it. Home values can rise and fall, and ultimately the market determines the value of a home - not the owner nor their Realtor.
So, how do I determine your home's value? I look at comparable homes in the area to see what they sold for. I look for homes close to the same size and condition and adjust the price accordingly for aspects that may enhance or detract from that comparable property.
And finally: Zillow. Those Zestimates are usually way off the mark. Zillow doesn't have any idea if you've updated your master bath or if the other home in it's algorithm had new hardwood floors. Basing your listing price on a Zestimate is like trusting a doctor to properly diagnose you over the phone.
Setting a home's price is as much art as it is math. In the end, a high price might seem enticing (for us both!), but if it is not supportable by these important market factors, then your house is not going to sell.
Don't price yourself out of the market!