The list price is a simple concept: It represents the price a seller is asking a buyer to pay for a property.
Typically, a real estate professional will help a seller determine list price by comparing similar properties, analyzing what sold recently, how much competition is currently on the market and what the competition is listed for.
So does a buyer have to pay the list price and is a seller locked in to a list price once advertised?
As the saying goes, everything's negotiable (almost everything, anyway). And this is where a top-notch real estate professional can make a big difference.
An agent will understand the current market, down to the specifics of an individual neighborhood. For a seller, the agent helps pinpoint an accurate list price that will help you sell fast and net the most money. For a buyer, the agent will understand which listings are priced accordingly and can advise you on potential negotiations — whether that involves price, repairs after inspection or other concessions.
The specifics of the market and the amount of competition are big factors in price. When there's a lot of inventory — meaning more properties on the market — there's generally more room to negotiate because buyers know they can probably find another property fairly easily if this one doesn't work out.
When there's less inventory, or a, hot' market during which properties are selling quickly, there tends to be less room for negotiation. Sometimes a seller may even get higher than asking price — this sometimes happens when there's a multiple offer situation.
Other factors come into play: the condition of the property; the seller's motivations (do they need to sell quickly or can they wait?); the buyer's motivations; the type of financing (will it be an easy process or one with a lot of government red tape); the amount of the down payment; and what kind of inspections the buyer wants.
All this is to say, while list price is simple in concept, the execution of it involves quite a few moving parts and the help of a professional to make sure you're happy with your decision at the end of the transaction.