# What Is a List to Sale Ratio?

The ratio indicates which way the market is moving.
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The list-to-sale or sale-to-list ratio is a sales metric used by real estate professionals to establish whether homes are selling more or less than the asking price in the local market. Buyers, sellers and real estate agents can use the ratio to determine a strategy for price negotiation.

## Ratio Shows Real Results

The price a buyer pays for a home is a true reflection of the home's value in the market. In most cases, the final sale price is not the same as the home's list price. Real estate professionals track list-to-sale ratios to establish genuine sales values in their local area. To calculate the metric, divide the actual sale price by the property's final list price and express the result as a percentage. For example, a home that is listed for \$200,000 but sells for \$195,000 has a list-to-sale ratio of 97.5 percent.

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## What the Ratio Means

A ratio above 100 percent tells the real estate agent that a home sold for more than its list price. This might happen where the seller receives multiple offers on the home. Conversely, a ratio less than 100 percent shows that a home sold for less than its list price. Real estate agents typically calculate the average list-to-sale ratio for a group of homes, so they can see at a glance which way the market is moving.

## Useful in Price Negotiations

Looking at list-to-sale ratios can help homebuyers and sellers negotiate on pricing. For example, an average list-to-sale ratio of less than 100 percent shows that sellers generally accept less than their asking prices in that particular market. Home seekers may be able to secure the property by making an offer that reflects the average discount that buyers are receiving. Sellers reviewing the list-to-sale ratio can see at a glance whether their list price is too low or too high, and adjust the list price accordingly.