The listing price of a home is often higher than the selling price.
Buying a home, especially for the first time, can be a daunting endeavor. Navigating the real estate world can be tough for a new buyer until she gets her bearings. The listing price of a home is a guideline for what the eventual selling price might be. It mainly gives a general idea of what the home is worth and what the seller has in mind when the deal is done. Listing prices are the first step in the process of negotiating the purchase of a home.
Listing Prices
The listing price of a home is the price listed in showcase magazines or in the newspaper. A listing price is the owner's initial asking price for the home. These prices are often inflated. Most owners start out at a higher price than they expect to actually receive.
Selling Price
The selling price of a home is the final purchasing price. Price negotiations begin with a potential buyer making an offer. The seller may accept or reject the offer. If the seller rejects the offer, the buyer may make another, lower offer. The selling price is the price eventually agreed upon by both the buyer and seller. Selling prices can be contingent on a variety of factors, such as repairs needed on the home and real estate market conditions.
Higher Selling Prices
In some cases, the selling price can end up being higher than the listing price for a home. This may be because of repairs or upgrades that are negotiated between the owner and buyer. For example, if the buyer insists that the roof must be replaced before he will consider buying the home, the selling price may exceed the original listing price due to the repair. The contract will not be agreed upon until such repairs are completed. Selling prices can also be higher when there are multiple potential buyers bidding on a single piece of property. Since both buyers are interested in the property, each may try to outbid the other in an effort to convince the seller to accept an offer.
Higher Listing Prices
A home may start out with one listing price. If the home does not sell in a reasonable amount of time, the owner may decide to make upgrades or repairs to the home to increase its market appeal. In these cases, the home may be re-listed at a higher price than its original listing price because of the improvements that were made. Listing prices may also be lowered if a seller is having difficulty attracting a buyer.
New Construction
Listing prices in new constructions often include only the basic floor plan and amenities. These are often customizable by a prospective buyer. If the upgrades are performed as requested and the deal falls through, the listing price may be higher the next time around. If the deal does go through, the selling price may very well be higher than the original listing price due to the further cost of meeting the buyer's requests.
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