What is the difference between list price, sales price and appraised value?

Usually in real estate there can be terms or expressions that you may not be familiar with, or which you get confused by, as they are all similar. Three real estate words that come into this category are list price, sales price and appraised value. Whilst all three words are similar, and in theory would hopefully be equal to each other, in dollar value, generally the case is that they are not.

So what are list price, sales price and appraised value? Well firstly the list price is what says; the price the property is listed, or advertised, for on the property market. Calculating the right list price is paramount to generating a fair and quick property sale.

In theory there are many ways to work out the list price. Seeking the advice of an attorney or realtor is the main way, and coupled with that idea is to ask your realtor to prepare a study of the current housing market. This housing market study is called a comparative market analysis (CMA) and is used to locate your house in relation to current market trends and conditions, by looking at similar houses to yours and their locations and list prices.

Additionally to the CMA you may wish to have an appraisal carried out on your home. Appraisals are an excellent way to gather valuable information on the condition of your house and how that, and its location etc, can affect the price or market value.

During the appraisal, an appraiser will conduct a through inspection of your property, as well as inside and outside of the house and the systems within it, such as water and gas. The appraiser will then use these, as well as specific criteria that can include proximity to desirable schools and recent similar property sales prices, to reach a decision as to the value for your property. Ideally this value will be the same as the list price generated from the CMA, or close. If it is not then you should look at compromising and choosing an intermediate value.

Due to the complex nature of real setae and the negotiation process that happens the offer that is received by a seller is sometimes not the same as the listing price. The sale price, should in theory, be the same as the list price, but in reality it is often not due to many different reasons. If the offer price varies from the list price then the compromise price should be sought. This compromise, i.e. the price that the house actually sells for, is the sales price.

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