What 97% of asking price really means
THE HOME GUIDE
WEEK 42 · MARKET LITERACY
What 97% of asking price really means
It looks like a precise measure of a real estate deal. But the meaning changes depending on which asking price you use.
ABOUT 8 MINUTES TO READ
LET'S START WITH THE MATH
97%
The home sold for 97 cents for every dollar of the asking price used in the calculation.
ASKING PRICE
$900,000
SOLD PRICE
$873,000
$873,000 ÷ $900,000 × 100 = 97%
You've probably heard a real estate statistic like this:
"Homes in this area are selling for 97% of their asking price."
It sounds like buyers are negotiating a 3% discount. That might describe the difference between the reported list price and sale price. It doesn't tell you whether buyers are paying below market value.
To understand the number, you need to know how it's calculated and what happened before the property sold.
01 / THE DEFINITION
A simple formula with an important limitation.
The sale-to-list price ratio compares a property's selling price with its listed price.
THE FORMULA
Selling price
Listing price
× 100 = Sale-to-list ratio
A ratio below 100% means the sale price was lower than the asking price used in the calculation. A ratio above 100% means the sale price was higher.
Neither result establishes what the home was actually worth. Sellers choose their asking prices for different reasons.
02 / WHAT HAPPENED BEFORE THE SALE?
One sale. Two very different percentages.
Imagine a home originally listed for $1 million. It doesn't sell, so the seller reduces the asking price to $900,000.
The property eventually sells for $873,000.
THE LISTING HISTORY
ORIGINAL LIST PRICE
$1,000,000
REVISED LIST PRICE
$900,000
FINAL SOLD PRICE
$873,000
VERSUS LAST LIST PRICE
97%
$873,000 ÷ $900,000
VERSUS ORIGINAL LIST PRICE
87.3%
$873,000 ÷ $1,000,000
The same sale produced a 97% ratio against the revised price and an 87.3% ratio against the original price.
That's a significant difference in the story someone might tell about the transaction.
Some reported statistics use the last listing price, while other analyses may use the original price. Always check the data provider's methodology. Relistings can also complicate how the history is interpreted.
03 / COMPARE TWO HOMES
Same selling price. Different headlines.
Consider two hypothetical homes that each sell for $800,000.
HOME A · LISTED HIGHER
Listed at
$850,000
Sold for
$800,000
SALE-TO-LIST RATIO
94.1%
HOME B · LISTED LOWER
Listed at
$760,000
Sold for
$800,000
SALE-TO-LIST RATIO
105.3%
Which seller achieved the better result? Tap to reveal.
Both sellers received $800,000. If the homes were otherwise comparable, the asking-price ratio alone wouldn't distinguish their financial outcome. Property differences, transaction costs and terms would still matter.
This is why an above-asking sale cannot automatically be described as a success, and a below-asking sale cannot automatically be described as a bargain.
04 / INTERPRETING MARKET DATA
What can a neighbourhood average actually tell you?
A local sale-to-list price ratio can help describe how selling prices compare with asking prices across a group of transactions.
But the result depends on which homes are included and how the statistic is calculated.
QUESTIONS BEHIND THE AVERAGE
Condos, townhouses and detached houses can behave differently. A city-wide figure may not reflect the property type you're considering.
Using the original asking price can produce a different result from using the last asking price.
An average of individual sale-to-list ratios can differ from the total selling prices divided by the total listing prices. The method matters.
A short period may include only a few comparable transactions. A longer period can hide more recent changes in activity.
An average ratio of 97% does not mean that every buyer negotiated 3% off asking.
It is a summary of transactions that may have involved very different properties, listing strategies and negotiation outcomes.
05 / TEST YOUR KNOWLEDGE
Can you read the ratio correctly?
Open each question to check your answer.
QUESTION 01
A home sells for 102% of asking. Did the buyer necessarily overpay?
Reveal the answer
No. The seller may have deliberately listed below the price supported by comparable sales. You need to assess the home's condition and value separately from its asking price.
QUESTION 02
A home sells for 90% of asking. Does that mean the buyer saved 10%?
Reveal the answer
The buyer paid 10% less than the asking price used in the calculation. That does not tell us whether the selling price was below market value. The original asking price could have been unusually high.
QUESTION 03
A neighbourhood's average ratio rises from 97% to 101%. Must property values be increasing?
Reveal the answer
No. Sellers may be changing their pricing strategies. The mix of properties sold may also have changed. To assess property-value trends, study comparable selling prices and suitable price indexes.
QUESTION 04
Two identical homes sell for $800,000. One reports 95%, the other 105%. Which sold for more?
Reveal the answer
Neither. They sold for the same amount. Their different ratios reflect different asking prices.
06 / APPLY IT TO YOUR DECISION
How to use this information in a real transaction
IF YOU'RE BUYING
Look beyond the discount.
Study what buyers paid for similar properties under relevant market conditions.
Look for price changes and relistings that may explain the current asking price.
Condition, location and future expenses can matter more than the percentage discount.
IF YOU'RE SELLING
Measure the outcome correctly.
Understand what comparable properties are selling for before choosing an asking price.
A deliberately low asking price may generate a high ratio without producing an exceptional sale price.
Consider the final price, contract terms and costs alongside the available market evidence.
07 / SAVE THIS WORKSHEET
Five numbers tell a better story.
□ Original asking price
□ Final asking price
□ Actual selling price
□ Recent comparable selling prices
□ Price and condition of current alternatives
With these numbers, you can move beyond the headline percentage and form a more useful picture of the transaction.
A percentage needs context.
A 97% sale-to-list ratio gives you one piece of information: the relationship between a selling price and an asking price.
It can be useful when comparing similar transactions calculated using consistent methods. It becomes less informative when listing histories and property differences are ignored.
Whether you're buying or selling, the more meaningful question is how the final price compares with the property's current market alternatives.
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