What Does A Home’s Listing Price Really Mean?
When someone decides to sell their house, one of the biggest decisions they have to make is how much to sell it for. Sellers, often with the help of a real estate agent, estimate the market value by looking at comparable houses that have sold and making adjustments for the size, condition, and location. When it goes on the market, that’s the listing price.
Ceiling Price vs. Floor Price
In the past, that listing price was usually a ceiling. If a buyer liked the house, they might offer that much, but in the past, buyers would try to figure out how much less they could offer below the full price. Today, it’s different. In the last couple of years or so, we’ve seen the listing price become more of a floor. That is, it’s the starting point for offers, and many times home buyers are offering more than that first listing price. The record low supply of homes coupled with very strong buyer demand has led to bidding wars, elevated sales prices, and frustrated homebuyers who offer more and more in hopes of not losing out on another home they’ve tried to buy.
Most SunCrest homes today are selling for more than the initial list price. So far in 2021, we’re seeing SunCrest buyers pay an average of 4.1% above a seller’s asking price. In some cases, they may even sell for a lot more.
It’s still very important to set the listing price correctly. Too high and you lose out on potential buyers, too low and you miss out on potential profit. As a buyer, you need to know going in that if you really love a home it may sell for more than the asking price. However, it’s important to remember on both ends that it’s not just about the total sales price; things like a higher earnest money deposit, waived contingencies, and flexibility in your possession dates can help round out a winning offer. Working with an experienced agent and using the listing price as a starting point can help you figure out what kind of offer to make or accept. For the best advice, reach out. we’d love to help you make all the right moves when buying or selling in the new floor pricing market.