Setting the Price
Location, demand, economy
The best way of knowing the true value of your house is to have an independent valuer to give you a valuation. They are skilled professionals who are legally liable for their services and have no financial interest in the sale. You can use this valuation against the appraisals given by the agents you are considering hiring to see how accurate the agents have been in their assessments. A good agent should be well aware of what similar houses in your area have sold for in recent months and can also access market analysis information that gives data on local properties that have sold or failed to sell, including the asking prices. Ask your agent to go through this information (usually called a Comparative Market Analysis) with you to show how they have arrived at the price they are suggesting. The agent (and therefore you) will also need to consider market conditions in terms of buyer demand, interest rates, inflation rates and any other factors affecting the economy. If changes in the economy are influencing the way people are spending, the property market is likely to be effected in some way. Your potential buyers too, should also have a fair knowledge of your house's worth, probably having seen every other house for sale in the area. Be aware however that it is in their interest to get it a lower price; so don't feel pressured into accepting a low offer.
Word of Advice: It is likely that you will receive varying recommended prices from the agents you invite to make appraisals. Don't immediately take on the agent who gives you the highest price. Some agents use this as a tactic to attract more business, however if you list your house at an over valued price, it may lose you valuable time in making the sale. In the meantime, you may get desperate enough to drop your price thus giving the dishonest agent the fee for a sale that could have been made months ago by the fair practicing agent.
Aim for the right buyers
Once you have set the price for your house you need to aim to attract the buyers who are able to afford it. Some techniques may attract many people to view your home, but this does not necessarily mean they are the right people. For example, if your agent has listed your house in a price range which begins much lower than its true value (say from $300,000 when it is worth 350,000), the people who will be interested will be those hoping to pay only the lower amount. If you only have offers for the lower amount, you may eventually be persuaded to accept a much lower offer than you could have received if you had aimed at people who can afford the full price (or more). Remember that attracting more viewers may give you more offers, but if you want to sell your house for what it's worth you need to aim for people able to pay your price or above. Quality is certainly better than quantity when it comes to finding potential buyers. If you have a good agent and trust them to get you the highest possible price, be patient and wait for an offer you will be happy with.
What's my profit?
Once you have a good idea of what your asking (or reserve) price will be, it's time to sit down and do the figures. You will want to have as accurate an idea as possible what you'll have left after everyone has been paid. Start with the lowest price you are willing to accept (though hopefully you will receive more than this) and take away the agent's commission, advertising and marketing costs, conveyancing fees, improvement costs and moving and relocation expenses. If you intend to pay off your mortgage or another loan take away this amount too. If you are buying elsewhere, there'll be many more expenses to take off as well, including the price of your new house, stamp duty, surveyors fees, conveyancing and so on.