Whether buying or selling, it is critical to properly evaluate the recent sales in the neighborhood.  Here are some tips:

1.  The recent sales of homes that are similar, and close-by are the most important - appraisers are reluctant to use comps that are more than a mile away, and buyers are doing the same.

2.  Check the type of financing used - and don't rely on comparable sales that used 100% financing.  There won't be many more buyers who can qualify for 100% financing, and those previous sales probably wouldn't happen again, at least not at those prices.  Not to mention the chance of fraud/artifically-inflated prices.

3.  Compare apples and apples - if your house needs work, don't compare it to one that is spectacular.  The gap between fixers and creampuffs is back, and growing daily.

4.  Functional Obsolesence - if there is a room or floor plan that is funky, the price has to compensate.  The guy trying to sell this house is already under the comps, yet no sale.  Why? because when you look at this family room, where do you put the furniture?  There is a walkway to the garage on the left, and glass slider to the right going out to the backyard.  They need a single person to buy this who only has a chair in front of the TV.

The price will have to be very lucrative for a buyer to overlook this flaw.

5. Search for total market time.  If there are multiple re-lists, then take that into account - the struggle to get that price was tougher than it appeared.

6.  Time of year - The sales during the prime selling season (Feb-June) benefit from more participants in the buyer pool.  Don't expect to sell in November for the same amount that people were paying in May - there aren't as many buyers looking during the fourth quarter of the year.

7.  The agent matters - if the house down the street was sold by a respected top agent, and you list with Aunt Bertha from San Berdo, you can expect to sell for less.

8.  If you are selling, and make it tough to see the house, the price better be very attractive to get fussy buyers to endure.  Likewise if you are a pig and can't keep your house clean, the buyers will expect a lower price to compensate.

9.  There are a few features that can really drive the pricing - if you have them, great, you'll get more attention, if not, many buyers will pass you by.  They are: big private backyard, one-story, three-car garage, new carpet and paint, and low or no monthly fees.  Location is most important, but without these extras you can expect the price to be lower. 

Carefully evaluate the comps as objectively as possible!