What is the first step before setting a price for a promise to purchase (PP)?

The first step before setting a price for a promise to purchase (PP) is to complete a market analysis of recent properties sold. Conducting a market analysis provides essential data about comparable properties that have recently been sold in the area. This analysis helps in understanding current market trends, property values, and the pricing strategies of similar homes, which are all crucial factors that influence the pricing of the property in question.

By examining the sale prices of comparable properties, a real estate professional can establish a competitive and realistic price point for the PP. This process helps ensure that the pricing aligns with market demand and seller expectations while maximizing the potential for a successful transaction.

Other options may include important steps in the overall transaction process, but they are not the foundational step for pricing a promise to purchase. Reviewing a buyer's mortgage details, contacting potential buyers, or determining the seller's desired profit margin are actions that can come later in the process after a market analysis has been completed.