I think you have an excellent point regarding closing costs. Ideally, all of this data should be based on the net sales price, not the gross sales price. However, I know here in Seattle (and I believe its similar elsewhere), seller paid closing costs are not noted either in the MLS sales price or the sales price found on the tax records. This is wrong for so many reasons.

1.) Apart from calling the buyer or buyer’s agent of every home sold to see if closing costs were built in, there is no way to tell what a home actually sold for.
2.) This also affects appraisals. Unless you have an appraiser who is willing to go the extra mile when doing his homework, built in closing costs can artificially inflate sales prices.
3.) Some sellers, especially builders, will negotiate 3-6% off of the sales price as long as it’s taken in the form of the seller paying the closing costs. As long as the top end number looks good, the builder’s happy. High sales price = high comps for the next deal.

I think MLS’s across the country should begin recording seller paid closing costs along with the sales price. This will allow all consumers to make a more informed decision when purchasing a home.

All the best ~
Trevor @ Redfin

1. Repackaged information will still get you attention, just because the topic is relevant and of interest.
2. There are still a bunch of dummies out there who don’t know how to buy real estate.

Does your data include seller subsidy? That can be as high as 2% on average, and if you forget that, all your numbers will be off. Numbers should be based on the NET price.

And when you calculated “off list” , are you using the current list price or the original list price?

Our local association NVAR continues to use, in my opinion, this incorrect math. They do it based on closed price as a % off current list price. When they did this, it was the same average “2% off.”

Add back in seller subsidy… and the average is 4% off. Add back in the Original list price and it grows to 6%. Add back in the original list price of the prior listing (DOMP) and you get 8% off.

So numbers are great and all, but it really depends on how you run the numbers.

Great marketing though.

Frank