# How to Calculate the Sell Price to Asking Price Ratio in Real Estate

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You can calculate the sell price to asking price ratio in real estate when you divide the price a homebuyer pays for a home by the most recent list price the seller asked for the home, and then convert it to a percentage by multiplying by 100 percent.

If the real estate sale price to asking price ratio is less than 100 percent, it means that the home seller has gotten lower home prices than they wanted. On the other hand, if the ratio is over 100 percent, it indicates that the homebuyer ended up paying more than the selling price.

It is worth noting that the real estate ratio is also referred to as the sale-to-list ratio, advises Redfin. In addition, Bloomberg reports that studies show that the current home sale price to asking price ratio stands at ‌99.8 percent‌, which implies that homebuyers and sellers have similar financial goals.

## How Is Sale-to-List Price Calculated?

You can calculate the real estate sale-to-list price as follows:

• First, determine the seller’s asking price, which could be the price that the realtor quotes, the price that the home seller says they want or the price listed on a real estate selling platform. In this case, suppose in your neighborhood, the market value is the current median asking price, which according to recent Realtor.com market analysis reports is \$392,000.
• Second, find out the final sale price of the home, which represents what the homebuyer finally paid. Suppose that final purchase price is \$380,000 after negotiation.
• The next step is to divide \$380,000 by \$392,000 (380,000/392,000) to get 0.969.
• Finally, you would multiply 0.969 by 100 percent (0.969 x 100 percent) to get 96.9 percent. Therefore, your sale-to-list ratio is 96.9 percent. That means that the seller of this particular home got 3.1 percent less than the asking price.

## What Factors Affect the List Price?

The list, or asking, price is simply the price that the home seller originally desires and will display in every advertisement concerning the home on sale. Many factors affect the pricing.

### Location

The average price of a home varies depending on the local market. For example, The New York Times reports that the median price of a home in New York City is \$755,000, while Redfin says a home in Dallas, TX currently costs \$399,000. Therefore, the location and cost of living in those areas would influence how a seller prices their home.

Also, the neighborhood the home is in and the amenities offered within that area, including schools, will influence the market price. Higher-end homes in secure neighborhoods and good schools allow the seller to charge more.

### Home Improvements

Home improvements reduce the need for the homebuyer to invest more money into updating the home. Renovations also enhance the overall appearance and functionality of the home. So, homeowners are likely to charge more to recover their investments. In new homes, no renovations are needed either, so developers can charge more too.

### Demand and Supply

If there are a lot of people who want homes and the housing supply is unable to meet that demand, then the home value is likely to be higher. That tends to happen when the economy is performing well, housing market conditions are excellent, mortgage rates are low, work is in plenty and people have higher wages.

## What Factors Affect the Sale Price?

What the home seller asks and what they usually get are likely to vary. The final buying price will depend on several factors.

If a home requires major improvements, then the potential buyers can make low ball offers that are less than the home sellers want. On the other hand, if the upgrades have been done, the home becomes more desirable and the buyer is likely to pay more to get the property since they won’t have to put in much work.

According to HomeLight, the average buyer would spend ‌7 percent‌ more for a home with curb appeal.

### Demand and Supply

If there is a higher demand for homes than supply, it would be considered a seller’s market. In that case, the homebuyer would have no choice but to pay what the seller is asking for, or more, to get the home. On the other hand, in a buyer’s market, there is lower demand, and homes are in plenty, allowing buyers to pay much less to get the properties they want.

## Why Is the Sale-to-List Ratio Important?

You can use the sale-to-list to determine if the home sold had lots of interest from potential homebuyers or not. If it is more than 100 percent, it indicates that there may have been a bidding war because the housing market is booming, and vice versa.

Also, averages of this metric of other homes sold can help you estimate the realistic amount of money to ask for when selling a home or the best offer price when buying a home. Then you can use the knowledge when making a counteroffer during real estate transactions for your benefit. In addition, the average sale-to-list ratio of a real estate agent helps you judge their overall performance.