Is there a significance to the List-to-Sell Ratio?
By Christopher Wells, Principal Broker
In my opinion this statistic is one of the more significant indicators of the state of the Real Estate Market. It is calculated as a percentage of a property’s sale price to the original list price. This ratio reveals the “discount” an average seller is willing to provide a buyer.
For example, the current L-to-S ratio for all property types sold in our market area for this calendar year is 93.4%. Using this percentage with the average number of days, 248, that a property has been on the market for sale, it is very telling that most properties are incorrectly priced. These data may be a weightier consideration for the owners of properties priced at the higher end of the market.
Mispricing properties has many implications. Lost use of funds, additional expenses, and additional financing costs, to name a few. The objective of a Realtor is selling the property as quickly as possible, for the best possible price, and under the most favorable terms for all parties.
Arriving at the best price can be accomplished two ways: 1) employing a certified, experienced appraiser. This will be the most accurate and reliable value opinion. They will consider many aspects of the property’s characteristics. The value an appraiser suggests is also significant in that prospective buyers seeking financing for the purchase can rely on this as a guide for their own purposes. 2) requesting a Broker Price Opinion (BPO). Although this is not as in-depth as an Appraisal, it is reliable and an acceptable alternative. The BPO may also be referred to as a Comparative Market Analysis (CMA). Most Realtors with experience in the market place have the expertise to provide BPOs or CMAs. Overall to achieve success, it is advisable to start marketing your property with an accurate price.