There are many things to consider when preparing your home for the real estate market. From making home repairs to improving curb appeal to arranging a 3D open house, there’s a lot to keep track of. But one thing many sellers forget to pay attention to is what’s happening around their property.
The greater real estate market in your neighborhood and county can directly inform what to expect during your home sale. And one of the best metrics to examine is the list-to-sell ratio. Today, we’ll answer all your questions about the list-to-sell ratio, including what it is and why you should care.
What is a List-to-Sell Ratio?
The sales price of a home divided by the last list price, described as a percentage, is referred to as the list-to-sell ratio (or list/sell ratio). If the list-to-sell ratio is above 100%, the home sold for more than the list price. If it’s less than 100%, the home sold for less than the list price.
For example, a home that was listed for $500,000 and sold for $505,000 has a list-to-sell ratio of 101%.
The original list-to-sell price is the most helpful, but final list-to-sell is more commonly found. The original list-to-to sell ratio paints a clearer picture of the transaction compared to the property as it was first introduced to the market.
Why is the List-to-Sell Ratio Meaningful in Real Estate?
For individual listings, high list-to-sell ratios are a direct result of agents using accurate sales data to price a home correctly for the current market supply and demand of a neighborhood. Obviously, sellers want to get 100% or more of the amount they are asking for their home for sale. And buyers want to pay less than 100% of the asking price, if possible. How far the final sales price differs from what the home was listed for reflects how negotiations concluded.
On a wider neighborhood or county level, evaluating list-to-sell ratios can help agents explain how closely buyers and sellers are estimating home values. Simply speaking, a high list-to-sell ratio indicates a strong real estate market where buyers and sellers are negotiating less over sales price.
As an example, the average list-to-sell ratio across WNC in 2012, when the housing market was still recovering from the Great Recession, was 93%. That is to say, there was a surplus of homes for sale, and the strong buyer’s market gave buyers the leverage to bid sellers down from their asking price. In contrast, our region’s current list-to-sell ratio is 98%. In some counties, we’re even seeing a list-to-sell ratio of 99%. These high numbers reflect the ongoing shortage of homes for sale and high buyer demand that is causing strong competition and high offers for homes.
What does Our Current List-to-Sell Ratio Mean for Home Sellers?
The median sales price for homes across WNC is up 17% in the last year alone. And the time a home spends on the market has dropped by more than half. Combined with the strong list-to-sell ratio, home sellers can expect any properly prepared properties they put on the market to sell quickly and for a high price.
Are You Ready to Sell? Start Today!
It’s our goal to give you knowledge and confidence in your home sale. The list-to-sell ratio should be one of many data points that an educated home seller considers when preparing their home for the market. Working with your agent, you should also understand other real estate market metrics such as months of inventory, available supply, and a comparative market analysis of similar properties.
If you would like more information about selling your home for top dollar, our experts at Beverly-Hanks are here to help. Contact your Beverly-Hanks agent today!
All real estate is local. In order to make confident real estate decisions, it’s important to have timely and neighborhood-specific information. Contact us today to speak with a Beverly-Hanks real estate agent about selling homes and land in Western North Carolina.
2 Responses to “What is a List-to-Sell Ratio, and Why Should You Care?”
I wasn’t even aware that there was something along the lines of a list-to-sell ratio, so it’s indeed a decent find! And as it turns out, this ratio is indeed critical.