The important amount is what you put in your pocket
- List price/sales price ratio can be a misleading stat to compare agents with
- If you tend to list low, your list/sales price ratio will be better
- Do they use the original list price or the list price when it went under contract?
Some agents use the sales price/list price ratio as proof that they are better than the average agent.
An agent might claim to sell his listings for an average of 99% of list price. But does that really net the seller more money?
Maybe the “99% agent” tends to under-price their homes.
Which is better?
99% of $500,000
97% of $520,000.
I’ll do the math for you.
99% of $500,000 is $$495,000
97% of $520,000 is $504,400
The “slackard” agent who only gets 97% of list price actually gets the seller $9,400 more.
With this statistic, you also have to be aware of what "list price" actually means.
Is it the original list price or is it the last list price when it went under contract after a series of price reductions?
If an agent lists a home at $550,000 and then gets the seller to reduce the price to $500,000 and it then sells for $500,000, some will say that it sold for 100% of list price.
Is that an accurate representation of what actually happened?
My Simple Rule of Thumb for Sorting Out Agents
Here's my simple rule of thumb that I give people to help them sort out agents.
Any agent who uses this statistic in their marketing, just cross them off your list. They are using a stat that probably doesn't give you a true picture of whether or not they actually sell homes for more.
The important stat is how much money is left in your pocket after all is said and done.