Another Bad MLS Stat- % Sale to %List

Recently I wrote about how our DOM is basically a bogus stat, one that is dangerously missing key information. Another stat we Realtors like to bandy about is the % Sales To %List Price Ratio... you know the one, here in Charlotte it is typically cited as 97-98.5%.

Often Sellers ask what your rate is, trying to compare you to this mythical average, (I'll prove the mythical part in a minute) when they are comparing Agents seeking Listings.

In fact our local MLS board proudly reported in September that the % Sale to List price was essentially unchanged from a year ago, therefore our market was perfectly healthy.

I feel better already. All I can say is we have a very wise group of sellers and even smarter Realtors who must price every property almost perfectly, don't you think? I can see the skeptical look on your face ...

Of course the title gives this away, but yes, the %Sale to % List stat is bogus too, for almost exactly the same reason as the DOM stat doesn't work for consumers-- it only reflects the last List price, not the first, exactly as the DOM stat only is taken from the last Listing date, not the first.

To make this easy lets say I list your home for $1,000,000. According to the MLS you can expect to get say 97% or $970,000 which you think is great because the house is only worth 500K. So lets agree the %Sale to % List is not a very accurate predictor of sales price, OK?

But then after a month, after we've received no showings and several anonymous notes asking if we always drink or smoke something before Listing, we lower the price to $500,000- the real market value and showings begin and your home is wonderful and we soon get a sale for full price, $500,000, which is also fair market value.

I just sold your home for 100% of List... 500,ooo Sales Price is 1005 of List price, the last List price anyway. Are you beginning to see the problem here? It is related to DOM this way, the MLS only reports your last List price, making there be no penalty for people starting high... other states, the original number always appears on the MLS sheet, so buyers, and their Agents know at a glance the Original price, and current price.

Yes, my agent readers will tell me we can look it up and provide that information to our Buyer client, and that is true. Just like looking up the actual DOM, I'll get a history of the Listing price at the same location-- but again why do we post our information this way?

Once again they report the price this way to protect the Seller and the Listing Agent-- by not putting the original Listing Price in, there is no penalty for pricing a Listing ridiculously high, to the seller or Agent.

What's going on? They are still hoping for the stupid buyer... you know the mythical "just fell off the turnip truck Beverly Hillbilly type" Well guys in the age of the Internet and Buyers Agency those days are gone.

I insist all of my Buyer Agents report the actual Days on Market, and the Original Price, on every property a client has significant interest in... it is just made harder by a delibarately opaque MLS.

And you've just got to love the liability switch-- by reporting DOM only on the Agent copy, the MLS never tells a client DOM, or original List price, only the Buyer Agent does, giving the MLS their "Get Out Of Jail Free" card if the buyer Agent neglects to provide this information- it dumps liability on the Agent if its ever a problem. Gotta love that!

Not.