Before you hit delete- I believe this chart is relevant to buyers and sellers in other neighborhoods and other price points as well.
I examined all the 55 Closed Sales in the Sammamish Plateau for the month of July 2009. For the sake of this analysis I zeroed in on the $300-500k market segment. One outlier was on the market for 3 years, I removed that.
First of all, the average discount off of the latest list price was only 3%. Meaning during the month of July, the average price a home closed at was only 3% lower than the price it was currently listed at. As you can see from the chart below- the trendline shows that the average house sold for 97% of the latest list price.
This means sellers and realtors are getting better at pricing, not perfect, but getting more efficient.
The horizontal (X-axis) measures days on market. The vertical (Y-axis) shows the Closed Price as a percent of List Price (List price being 100). The average days on market is 111 days or 3.7 months. The most any buyer paid was 103% above list and surprisingly only one property sold for more than 10% off the current list price. Only two houses out of 55 sold for more than 6% off of list price.
Many buyers think, “This listing has been on the market for 120 days. I can lowball the seller.” This chart debunks that myth. As you can see the, red trendline stays relatively flat as the days on market increase.
What this is not! This is not the % of the ORIGINAL list price. Here, I would expect a large downward slant, but what it does tell you is that the listing price that you currently is very close to what you will pay as a buyer if you are serious about actually closing. Seller’s are not negotiating offers more than 6% off of the last list price 96% of the time!
At the risk of stating the obvious, the most telling signal of what a seller will take for their property is the current list price. It’s not rocket science! In this market segment- the average list price was $427,000 and the average discount off the last list price was $13,000. When a seller holds a price out on the market they are willing to negotiate about another $10,000 to $15,000 off of the current list price and no more in this segment.
Perhaps the typical offer comes in $20,000 to $30,000 low and during the negotiations the two parties “meet halfway”- landing near the $13,000 mark. As a buyer- if you are coming in 10% low and are not willing to come up higher- it is very unlikely you will secure a house if you are a buyer. Seller’s have a floor- and it is somewhere around 5% below their list price. Don’t waste your time if you are not willing to come near the 97% mark.
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