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Real Estate Information |
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Why Average Sale Price Statistics are Misleading
One of the most common statistics used when gauging the strength of an area's real estate market is the average sale price of its homes, but looking into that figure more deeply reveals just how misleading it can be. When listing a home for sale, most realtors establish a price for the home based on market comps of the area - taking into account what other houses sold for and how the home they are listing compares to those. That price is a gross sale price, however, and doesn't reflect what the home owner actually receives from the sale. The difference between the gross sale price and the amount with which the seller actually gets to walk away from closing is affected by a number of factors. Most people would be surprised to discover that home owners in hot U.S. real estate markets like California, Florida or Las Vegas often receive offers for their homes that actually exceed the asking price. That is because in almost all other U.S. cities, statistics suggest that a realtor usually secures an average sales price of only 92 to 95% of the listing price. In addition, a number of other costs must be subtracted from that figure as well:
After all costs are figured in, the seller often walks away with only 75 to 85% of what the house "sold" for. This should not reflect negatively on realtors by any means - their services are still very much in demand and are invaluable for many home owners - but the more people realize the difference between what their home sells for and what they actually net, the more the number selling their home through "non-traditional" methods continues to rise. It's easy to find two houses on the same street in any neighborhood in the U.S. where the seller who sold their house for a higher price actually received less money at closing. If real estate prices were discussed in terms of net price to the seller rather than gross sales price, more home owners would discover that, for them, alternate channels for selling their home are more profitable than going through a realtor. Duane LeGate is president of House Buyer Network, one of America's largest networks of home buyers. Since 2002, they have helped more than 45,000 families and individuals who needed to sell a property fast-processing more than $7.5 billion in property during that time.
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Take a look The Patriot Ledger Eric Adams Is Raking It in From Big Real Estate New York Magazine Best Real Estate Stocks Trusted Expert Guidance - Overwhelming financial success Autocar Professional Real estate sales in Peoria, Tazewell and Woodford counties for July 19, 2025 Peoria Journal Star Top Stocks for Real Estate Investment in India Premium Financial Forecasting Tools - Unmatched market performance PrintWeekIndia Top Real Estate Stocks Fast Growth Stock Alerts - Phenomenal capital gains Autocar Professional Mediterranean-style mansion in The Woodlands among priciest home sales week of July 6 (PHOTOS) The Business Journals New Valley mansion near Billionaire's Row lists for $13.5M The Business Journals Real Estate’s Big Gains From AI Morgan Stanley Bard College hires real estate advisor and broker to sell Simon’s Rock campus - The Berkshire Edge Best Real Estate Stocks Expert Backed Stock Investments - Superior portfolio returns Autocar Professional HGTV’s Egypt Sherrod Shares Cryptic Message After ‘Married to Real Estate’ Cancellation tvinsider.com Scammed, Shamed and Deepfaked: Real Estate Agents Speak Out on the $15M Crypto Con National Association of REALTORS® Best Real Estate Stocks Smart Trading Moves - Explosive earning power Autocar Professional Best Real Estate Stocks in India Low Risk Stock Investments - Superior portfolio returns Autocar Professional |
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