This might surprise you. It surprised me!
More than half (52%) of homes that sold in the first half of 2020 sold for MORE than their list price!
It is certainly true that we have seen buyers being able to negotiate less and less over the past few years as the market has become tighter in many price ranges and locations -- and this is some specific evidence that now many buyers aren't able to negotiate at all!
Plenty of caveats, of course...
- All homes aren't going to sell for their list price or greater, as there is not an equally high demand for all types of properties in all locations and in all price ranges. The higher the demand for the type/location/price of home you are selling, the higher the probability that you will sell at or above list price.
- You can't just put any price on a house and sell it for the list price or higher. A good portion of these homes that sold at or above list price were a result of the sellers choosing to price their homes at a realistic price point. If the 42% of home sellers that sold for 100% - 102% of their list price had all listed their homes at a price 10% higher than their actual list price, it is highly unlikely that they would have sold at or above the list price.
- These statistics are calculated based on the last list price. If a home is listed for $350K, reduced to $340K and then to $330K and then sells for $325K it will be noted as selling for 98.5% of the list price. But in this example it also is true to say that it sold for 92.8% of the original list price.
- This analysis does not account for any concessions (typically a closing cost credit from seller to buyer) that may have been incorporated into the contract price causing the list price to sales price ratio to be higher than it really would be if those concessions were subtracted out. For example -- a house listed for $200K that sells for $205K with a $5K closing cost credit from seller to buyer would appear to have sold for 102.5% of the list price but if you asked the seller they would probably say it sold for 100% of the list price.
Anyhow, regardless of how you slice the data, the market is hot in many price ranges and buyers are often finding themselves needing to be prepared to pay the full list price or even a bit higher to secure a contract on a home!
Recent Articles:
