You see it everywhere these days:
“This Home SOLD for 110% of list price!”
“SOLD for $50000 over asking!”
These claims are sexy, which is why they’re used often by real estate salespeople to promote their ability to get homeowners top dollar for their home.
As a by product, they also tend to scare the heck out of buyers, who may feel that they will need to grossly overpay for their next home.
In both cases, neither may be true.
The problem with these statements is that a simple “% of asking price” stat on its own doesn’t necessarily correlate to a higher-than-average selling price. To illustrate:
Agent Smith sells a home for $350000, which is $20000 over the asking price of $330000. But, similar homes in the neighbourhood have sold for upwards of $360000.
Did the sales representative in this case really get their seller clients top dollar? Did the buyer really overpay?
What you, as a buyer or seller, really need to know is what homes are selling for in relation to current market value.
When looking for homes – or considering an offer – your real estate salesperson should be able to identify the relative value of each home through looking at comparable properties, their price per square foot, etc. This context, combined with a thorough understanding of multiple bid strategies, is what you need to make strong-yet-sensible offers on a home – and not feel like your overpaying just because you’re going over the asking price.
While the process of determining a team or salesperson’s ability to truly get top dollar for your home is based on the same analysis outlined above, you’re likely only going to hear the common refrain during a listing presentation: “We get X% over asking price for homes.” Comparative data is what matters here – and you’ll likely have to ask for it:
- How many homes have you/your team sold? (volume makes for more reliable sales stats and averages)
- Have you recently sold homes in my neighbourhood? (are these stats relevant to my area)
- What were the results? (price per square foot, days on market)
- Did they sell for more than comparable homes?
Even in a hot market, skilled marketing, deep connections and negotiating prowess matter. When homes are selling quickly, these skills and abilities may not make the difference between winning and losing a bidding war, or selling and not selling your home – but they can make a huge difference to your bottom line at closing – and how confident you feel about your decisions throughout the buying or selling process.