Email Elizabethlist price to sales price ratio
Leaving Money on the Table When You Sell Your Home.
How can you know if you’re leaving money on the table when you sell your home? For starters, why not hire a top Sacramento Realtor with hundreds of positive testimonials, so you don’t leave money on the table! When you see a team with more than a thousand sales and hundreds of 5 star reviews, you can take away that it wasn’t luck. Skill is how you continue to grow your business after decades of experience. You update and evolve with the times.
Realtors who have a strong web presence and stay relevant in the use of technology tools and marketing do not simply price a listing low and throw it on MLS, like some might think. When we listed homes for sale, say, in the early 1980s, a For Sale sign was the marketing, on top of door knocking. There was a blue book with property lisings. Buyers often walked into a real estate office and talked to an agent on “floor duty.” Very rarely do buyers walk into real estate offices today to look for property. Buyers look on the internet today and, guess what? No internet available in 1980. We have come a long way baby, LOL.
What sparked my blog today? I was evaluating a property value that the Weintraub & Wallace team is working on. It is in a cookie-cutter neighborhood in Sacramento. These are the same floor plans built one to two years apart with very similar lot size. Easy price comparisons in these type of neighborhoods.
I found 5 sold properties with the same floor plan sold with in the last six months. The lots are almost identical size. Year built 1999 – 2000. All located within 1 / 2 mile of the subject property. Conditions were a bit different. Some had updated kitchens and bath. These are not custom homes.
The sales in 6 months in this neighborhood showed a recent closing at $339,000. MLS data said it needed a little work but was a great value. Our listing needs a little work too. The highest closed sale to date was $391,000 with some updates. A $52,000 price range difference between low to high. All five properties are less than 20 years old with stucco exteriors, tile roofs and slab foundations.
Our listing will go on the market in the high three-hundreds. It also needs a little bit of work but has been cleaned up and painted. Based on demand and an average of 20 days on market, we can obtain a very nice sales price for our client. So leaving money on the table when you sell your home can happen but not for our clients. In this study, even if it was only .25 of the $52,000, that is $13,000 almost my entire brokerage fee! If it was half, it is $26,000, and this savings pays our entire 6% commission!
Would any seller be happy if she left money on the table? No, of course not. Does an average seller know how to read a comparison market analysis? Not in my experience, sellers rely on their agent to explain and interpret. Studying the market means hours of looking over sales data and hundreds of photos. Looking at maps and plot plans, it is not a 5-minute quick search. There are adjustments to be made for amenities or lack thereof. Also, we have to look at price reductions, and properties that failed to sell (called expired listings).
If you want to ensure you’re not leaving money on the table when you sell your home, find out what we do different. Call us today to book an appointment to evaluate your property value. The Weintraub & Wallace team with RE/MAX Gold will always work for your best interests. Call 916-233-6759.
— JaCi Wallace
Why List Price to Sales Price Ratios Are Useless Agent Comparisons
I get it that’s it’s super difficult for many people to hire a Sacramento real estate agent, but comparing list price to sales price ratios is meaningless. I also realize that it’s especially challenging to hire an agent if those same people don’t really understand the profession nor harbor much respect for agents. It’s tricky for some of us to operate in an environment where so many in the public openly despise real estate agents. I think our popularity lies somewhere between used-car salesman and funeral home directors. What a wonderful world.
The way I make it through decade after decade of selling real estate is not to pay a lot of attention to the negative opinions that some people form because they don’t apply to me. I know that I do an excellent job for my clients, and these people are happy with my performance. Sometimes, though, I run into potential clients who have not dealt with a real estate agent like myself, and they don’t understand how I do what I do, and they expect to understand it instead of appreciate it. The only way to really understand the real estate business is to put on my six-inch heels and amble down railroad tracks wearing headphones with your back to the oncoming train.
Although I have never been asked for my list price to sales price ratio, a potential seller asked me for it. I didn’t even know my number because it carries no value. It’s like a Select Comfort sleep number. Some people like 40 and others 100. I ran my production numbers for last year, and that number is 104.21%, including the good deals buyers got –which contained some under-market transactions in a seller’s market when most buyers paid over-market, if they were able to buy at all in last spring’s frenzy.
See, this is the problem with list price to sales price ratio. So many variables. You can have a short sale, for example, in which the market value is, say, $300,000, but the bank demands $310,000 at the 11th hour, holds the buyer hostage, and it ends up closing at $310,000. Does that make the listing agent a much better agent? Not really. Out of the agent’s control. Or, what about the sellers who insist their home is worth $500,000 and secretly hope a buyer will lowball. I take some of those listings because it’s not my place to choose the sales price. If that overpriced home finally sells at $450,000, does that make me a bad agent? Not really.
What about changing markets? Markets that shift from a seller’s market to a buyer’s market, which can happen in any given time period. That affects the list price to sales price ratio. On top of this, there are a dozen other scenarios that can affect these ratios, including who is to say an agent who routinely sells at 104% is not deliberately underpricing her listings? Hmmm? But probably the biggest factor is every agent has the ability to change the list price to match the final sales list price prior to closing, and then the ratio is 100%. I know some agents who do it just so they can say their ratio is 100%.
List price to sales price ratios mean very little, and then mean even less when an agent’s production is limited to say, 6 or 8 homes a year. The moral is don’t judge an agent on list price to sales price ratios. If an agent with a high ratio is telling you it’s meaningless, that in itself should speak volumes.
