I think most agents who have been around awhile would agree that pricing correctly is key in both getting the property sold and getting your client the highest return. For that reason, one of the statistics that I especially pay attention to is the list-to-sale price ratio which is the difference between the asking price and the closed price.
This statistic is very telling and of use to both buyers and sellers. Basically it helps you understand if an offer is worthy of serious consideration.
I have had many buyer clients in the past few years who think that an offering price of 20% off asking is totally reasonable. When they hear that the market is down 25-30% from the high they assume that the current asking prices are inflated by those percentages. When I give them accurate data on what the average list-to-sale price ratio is they are better able to put together an offer that they can negotiate and have a chance of getting accepted.
Similarly, with sellers it's important they understand this statistic as well. It is especially important to introduce these stats when first pricing the home, so there's a clear understanding of the potential range of offering prices and how to recognize an offer that should be considered and not rejected outright.
If you are pricing correctly, this statistic for your business should clearly reflect it. I'm pleased to say that in 2010 Resources Real Estate had a list-to-sale price ratio of 95.79% in 2010 for our sellers while the average list-to-sale price ratio for all Monmouth County real estate companies was 93.52%. That's a difference of 2.27%! For a $1 million dollar home sale, that's a savings of almost $23,000 that we provide our clients!
And so far this year we're doing even better with a list-to-sale price ratio of 97.59% thru February!
Resources Real Estate also has one of the highest average sale prices of any company in northern Monmouth County so we know we're not underpricing either.
So whether you are an agent, home buyer or seller, take some time to understand this statistic and use it to better understand the market, no matter where it's at.
Thomas McCormack
Broker-Owner
Resources Real Estate
112 East River Rd | Rumson, NJ | 07760
732-212-0440 www.thomasmccormack.com
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Good post, thanks Thomas
Good Morning Thomas, You made a good point that if you price the home right you should get that price or a wee bit less.