Listed Price vs Actual Price

List price is what a seller is trying to get for the property.

Actual Price is what a buyer is willing and able to pay.

The price of a home is often a mysterious number even to real estate professionals. Some sellers assume that the sell price (the value) is their purchase price plus all the maintenance costs while they have owned it plus some magical profit they want to earn.

In reality, the sale price of the home has many factors – and none of them are related to the purchase price, the maintenance costs or profit the owner wants to pocket. Case in point is the 2008-2009 real estate correction. I will not call is a crash because it was the result of artificial price increases based on want, will and greed. More on that another time.

Most buyers who purchased 2005-2006-2007 immediately lost as much as 50% of their ‘equity’ during the crash. While the market has indeed recovered – some areas (zip codes, neighborhoods, etc) are slower to recover and many are still underwater with what they owe vs what the house would bring on the open market.

When pricing a home for sale, many factors much be considered. Done right the house will be priced right and will sell at or near (a little above or below) the list price.

However, buyers can be fickle. And styles change. What was “IN” a couple years ago may be the one thing people don’t want now.

Sellers often have problems separating List vs Actual. This is especially true of FSBO sellers who don’t have the experienced agent standing beside them as the set the price. Many sellers even when working with top flight agents have problems accepting the Actual Price is not their List Price.