I've noticed that many consumers are searching for an explanation of "list to sell ratio."

So, I thought I'd try to give a simple explanation. In our area, our multiple listing service compiles data on a continuing basis and is able to spit out this information quickly.

The list to sell ratio is found by comparing the actual closed price with the listing price. Now, there is a problem here as some of you may have guessed.

Here's an example: Property lists for $500,000 originally. But, it is reduced to $450,000 over a period of eight months. It finally sells for $400,000. So, what would you guess the list to sell ratio will show?

In this case it would be 88%. This is based on the last price. But if we know the original listing price we can come out with a truer picture. However, I think that the ability to do this is restricted. So, at least, our MLS just uses the last known listing price.

In my subdivision, we had a house come on the market originally for $650,000. Relisted for $550,000. Sold for $500,000. So, if you used the 90% list to sell ratio it would be somewhat accurate. So much better to have your buyer's agent research the property history so that you know before you write your offer.

Another way to use this statistic is to ask your future listing agent what her list to sell ratio is. In other words, if she listed 100 homes and only had 50 sell, then her ratio would be 50%. Average. You might want to consider an agent who has a much higher ratio...closer to 80% or more. Why? Because this agent is probably better at pricing property correctly and knows what needs to be done in today's market. Not every agent does. Fair warning!

C 2008 Move UP to Naperville Blog