Should You Offer List Price On A Home?
Posted by Richard on May 11, 2021
The list price is a simple concept: It represents the price a seller is asking a buyer to pay for a property.
Typically, a real estate professional will help a seller determine list price by comparing similar properties, analyzing what sold recently, how much competition is currently on the market and what the competition is listed for.
So does a buyer have to pay the list price and is a seller locked in to a list price once advertised?
As the saying goes, everything’s negotiable (almost everything, anyway). And this is where a top-notch real estate professional can make a big difference.
An agent will understand the current market, down to the specifics of an individual neighborhood. For a seller, the agent helps pinpoint an accurate list price that will help you sell fast and net the most money. For a buyer, the agent will understand which listings are priced accordingly and can advise you on potential negotiations — whether that involves price, repairs after inspection or other concessions.
The specifics of the market and the amount of competition are big factors in price. When there’s a lot of inventory — meaning more properties on the market — there’s generally more room to negotiate because buyers know they can probably find another property fairly easily if this one doesn’t work out.
When there’s less inventory, or a “hot” market during which properties are selling quickly, there tends to be less room for negotiation. Sometimes a seller may even get higher than asking price — this sometimes happens when there’s a multiple offer situation.
Other factors come into play: the condition of the property; the seller’s motivations (do they need to sell quickly or can they wait?); the buyer’s motivations; the type of financing (will it be an easy process or one with a lot of government red tape); the amount of the down payment; and what kind of inspections the buyer wants.
All this is to say, while list price is simple in concept, the execution of it involves quite a few moving parts and the help of a professional to make sure you’re happy with your decision at the end of the transaction.