List Price vs Sell Price: What’s the Difference?
Key takeaways:
- List price is the initial asking price.
- Sell price is the final, agreed-upon price.
- The difference between the two reflects market status and negotiation outcomes.
In the world of real estate, you’ll often hear terms like “list price” and “sell price.” While they might sound similar, they tell very different stories about a home’s status on the market. Understanding the distinction between these two is important to making informed decisions, whether you’re buying or selling. In this Redfin real estate article, we will help you understand list price vs sell price so you have the knowledge to help you sell your home faster.
What is the list price?
Think of the list price as the initial asking price for a home. It’s the amount a seller, often with the help of their real estate agent, publicly advertises their property for. This price is usually determined by a combination of factors, including:
- Market conditions: What are similar homes in the area selling for? Is it a buyer’s or seller’s market?
- Home features: The size, age, condition, and amenities of the property all play a role.
- Seller’s goals: How quickly does the seller need to move? Are they hoping to maximize profit or prioritize a fast sale?
The list price is essentially a starting point, a strategic figure designed to attract potential buyers and generate interest.
What is the sell price?
The sell price, also known as the sale price or closing price, is the final amount a buyer actually pays for a home. This is the price recorded on the official sales contract once the deal is closed. The sell price can be higher or lower than the list price, and it’s the result of negotiations between the buyer and seller.
Several factors can influence the final sell price:
- Negotiation skills: A skilled negotiator on either side can significantly impact the outcome.
- Buyer demand: In a hot market with multiple offers, the sell price often exceeds the list price.
- Home inspection findings: Issues discovered during an inspection can lead to price adjustments.
- Appraisal results: If a home appraises for less than the agreed-upon price, the buyer’s lender may not approve the full loan amount, potentially leading to renegotiation.
Why the difference between list price vs sell price matters
The gap between the list price and sell price can reveal a lot about the real estate market and a specific property.
- For sellers: If your home sells for significantly less than your list price, it might indicate that your initial price was too high for the market or that there were underlying issues with the property. Conversely, a sell price above the list can mean your home was priced competitively and generated strong buyer interest.
- For buyers: Seeing homes consistently selling above their list price in a particular area suggests a competitive market where you might need to act quickly and potentially offer more than the asking price. If homes are selling below the list price, it could indicate more room for negotiation.
Frequently asked questions: List price and sell price
Find out some of the tricky questions home sellers and buyers are asking about listing price vs. selling price and why this distinction matters in today’s market.
Is it always better to list my home higher than I expect to sell it for?
Not necessarily. While some sellers aim high to leave room for negotiation, overpricing can deter potential buyers and cause your home to sit on the market longer. A well-researched, competitive list price is often the most effective strategy.
What if a home sells for exactly its list price?
This can happen, especially in a balanced market where the initial pricing was spot-on and both parties are satisfied with the terms.
How can I find out the sell price of homes in my area?
Your Redfin real estate agent can provide you with comparable sales data, which includes the final sell prices of recently sold homes in your neighborhood. This information is invaluable for both buyers and sellers.
