Just because a home is put on the market at a specific price, doesn’t mean that is the price the house will sell for. Throughout the process of buying or selling a home, Realtors make negotiations on behalf of buyers and sellers in order to establish terms of the sale.
List Price
The listing price is the amount the house is put on the market for. Generally, the seller will meet with their listing agent, review the comparative market analysis (CMA), and decide on a list price that the sellers feel comfortable with.
Sellers will always want the most money when selling a home – and their agents wish to get that for them as well. It’s important to be strategic when deciding on the listing price, especially when there is a tight timeline to get the home sold. Work with a Realtor who is honest about the value of your home in today’s market.
Sales Price
The sales price is the final amount the house sells for at closing. The selling price does not always match the listing price; it can be lower or higher, depending on the current housing market. The final sales price is agreed upon by both the seller and the buyer during negotiations.
- Lower than Listing Price. If a home has been on the market for an extended period of time, or during a buyer’s market, a purchase agreement may be signed for less than the original asking price. After an appraisal, if the home is valued at less than the listing price, there may be more negotiations, often resulting in an agreement for the appraised value.
- Same as Listing Price. People often assume that most houses sell for less than the original asking price, but this is not always the case. In a balanced market with active buyers, your agent may recommend going in with a full-price offer to show that you are serious.
- Higher than Listing Price. Homes may sell for more than the listing price during a seller’s market. When there are more buyers than there are homes for sale, buyers will offer more than asking price to beat out competitors. Other times, the seller may purposely make the listing price lower than the value of the home to create a bidding war.
Questions on how to price your home?