A couple days ago, I wrote about whether it was a buyer’s or seller’s real estate market in the Olentangy school district. In that report, I calculated the absorption rate of current inventory by the various price ranges. At the end of the article, I noted that making an initial offer of 85% of list price might not sit well with sellers in the lower price ranges, but might be worth a try in the very high price range where the absorption rate was quite long.
A reader asked whether a seller would agree to the 85% ratio or whether that would just be a starting point on an offer on homes priced over $500,000. Naturally that depends on the seller and whether their home is competitively priced or not.
To better answer that reader’s question, I went to the MLS system to calculate the ratio of sell price vs list price for each of the price ranges. The following chart shows the AVERAGES for single family homes that have sold since January in the Olentangy school district. Of course, I have no way of knowing what the initial offers were. All this tells us is what the seller and buyer finally agreed to for a selling price.
| Price Range | Avg List Price | Avg Sold Price | Avg List/Sell Ratio | Avg $ Discounted |
| $500′s | $550,355 | $505,957 | 92% | -$44,398 |
| $600′s | $649,650 | $615,359 | 95% | -$34,291 |
| $700′s | $767,200 | $715,650 | 93% | -$51,550 |
| $800′s | $862,450 | $812,500 | 94% | -$49,950 |
| $900′s | $992,450 | $910,000 | 92% | -$82,450 |
| $1,000′s | $1,524,155 | $1,274,750 | 84% | -$249,405 |
As an example, if you’re shopping for a home priced in the $900′s, should you automatically expect a seller to settle at 92% of the list price? NO! These are AVERAGES. Each home will have a unique situation. Your best advisor is your real estate agent. They can check to see how long the home has really been on the market (the DOM resets every time a seller changes agents). They can view how frequently the seller has taken price reductions.* They also can analyze comparatives to determine how they compare to the home under consideration. Armed with all the data, the agent can help the buyer develop a strategy for how their offer should be positioned so BOTH parties feel good about the transaction. And, remember that it’s not always about the price but other terms of the contract are important as well.
* I once saw a home that had been on the market for some time with regular price reductions of a certain amount leading us to wonder “how low will they go and how long did they plan to keep it up?”.
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