1. Find a similar property listed on the MLS. By similar I mean the same number of bedrooms/bathrooms in the same location.
2. WRONG. That house is better than yours. Pick a slightly less desirable one. Your house is not as special as you think it is.
3. Write down the listing price.
4. Multiply this number by 0.97 - listings on the MLS that are selling are averaging about 97% of asking.
5. Multiply this number by 0.95 - this is an additional adjustment factor due to the high number of listings and low number of sales in the current market.
6. Round down to the nearest cool sounding number
Take for example this townhouse in Millwoods (Edmonton) listed at $327,900.
Find a similar listing on the MLS like the one here for $255,000. Same building same square footage.
Since this is on the MLS and hasn't sold yet its fair to say that it will likely sell for under asking. Average is about 97%.
255,000 * 0.97 = $247,350
Apply the extreme market conditions adjustment factor
247,350 * 0.95 = $234,983
Steps 1-3 are the most important. If there is a high inventory and low level of sales on the MLS why would someone spend significantly more to buy privately?