What Is The List Price?
List price is defined as the probable price at which an individual/group of people could buy an asset in the market.
Before the conclusion of the listing price, there is usually a listing agreement. List price would involve a listing agreement that is a form of legal filling between the owner of the asset or property and the broker, in this case, real estate.
The listing agreement will contain sort deeds of agreement between the two parties. It lays out the market strategy for marketing the asset or property, like how the property would be advertised and attract serious potential buyers and what the broker should expect from the deal at the end of the day. By setting up a frame-up like this, the list price could be deducted.
Ascertaining the list price of real estate assets is mainly done by using a concept called comparative market analysis. Many in the business believe that this analysis is the most effective technique for determining the price of an item. Because no two assets may have the same worth, the brokers survey prices of similar assets within the same environment. They then make some price adjustments variations. There will always be some factors that them different. But let say the property that would be sold is one of a kind, with no property to compare with; in this scenario, an appraiser would be needed to find out the price.
List price does not in any way mean it cannot be changed. This means list prices for assets are not always fixed most times. This is so that factors may contribute to the alterations of the cost.
Although there are times that the sellers set a fixed price that would not be changed, this signals that sellers don’t want to negotiate at all on a property.
But most times, list prices are just set in anticipation of what the buyer will bid. Typical in the market, most times, buyers would bid less than the valuation of an asset. Because sellers anticipate this, they would have to up their list price so that the buyer would have to raise the bidding price.
List Price Example
If an individual is interested in buying a property, the list price will be presented which will detail the bidding amount, the means of advertisement, and the cut for the broker.« Back to Glossary Index