The list to sales price ratio, also known as the sale price to list price ratio, is a metric used in the real estate industry to determine the relationship between the final sales price of a property and the original asking price. This ratio is typically expressed as a percentage, and it provides insight into the state of the real estate market and the relative strength of the seller’s position.
For example, if a property is listed for $500,000 and it sells for $450,000, the list to sales price ratio would be 90%, indicating that the seller had to accept a lower offer than their original asking price. In a strong seller’s market, where demand for properties is high and there are few homes available for sale, this ratio may be closer to 100%, indicating that sellers are able to command full asking prices for their properties. In a buyer’s market, where demand is low and there is an abundance of homes for sale, the ratio may be lower, indicating that buyers are able to negotiate lower prices. In Utah, during 2020 and continuing through the 1st quarter of 2022 this ratio was over 100%, meaning that sellers were regularly accepting offers above the price they were asking.
This ratio can be useful for both buyers and sellers, as it provides an indication of the relative bargaining power of each party. For buyers, a low ratio may indicate that they are in a good position to negotiate a lower price for a property. For sellers, a high ratio may indicate that they are able to command a higher price for their property. Real estate agents and brokers often use the list to sales price ratio to help guide pricing decisions and to provide market insight to their clients.
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