Buying a new house is so much more than the selling price. There are legal fees, closing costs, and moving expenses, just to name a few. So, if you could potentially save $40,000 off the listing price, wouldn't you jump at the chance? A new report from Realtor.com looked at the wording of online real estate listings and found that certain value phrases—specifically those like "priced to sell"—can shave tens of thousands of dollars off a home's price. However, this isn't true of the whole country.
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“We have all seen listings with terms like under valued, priced to sell and bargain, and we wanted to find out if those terms actually came with a price reduction,” said Ralph McLaughlin, senior economist, Realtor.com. “We found there is a relationship between key value phrases and listing prices. For a keen eyed buyer who is willing to spend a little time looking at listings, targeting these key phrases might be a great place to start.”
To arrive at their findings, the analysts looked at all the single-family homes listed for sale on Realtor.com in the U.S. on Aug. 10, 2024. They then parsed out those with listing descriptions that included the words "priced to sell," "bargain," "under valued," "fixer upper," "contractor special," "handyman special," and "under priced."
They discovered that these phrases "are associated with listing prices that are 8.5% lower on average than similar homes with similar configurations in similar neighborhoods," according to the report. This amounts to an "average discount of just under $38,000 off the median priced home."
But not all parts of the U.S. had as much of a discount. After examining the country's 100 largest metro areas, only 38 saw discounts associated with these phrases.
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“Much of this variation can be explained by the share of listings with such listing terms, suggesting that buyers in markets with few listings that are 'priced to sell' may be more sensitive to the characteristics that are associated with a lower than the usual listing price–such as home condition–than buyers in markets where such listings are more common,” explained McLaughlin.
Overall, states in the South and Midwest saw the biggest discounts on "priced to sell" listings. The report found these to be the 10 metro areas with the steepest discounts:
- Wichita, Kansas: -10.9 percent
- El Paso, Texas: -11.2 percent
- Tulsa, Oklahoma: -11.4 percent
- Cambridge-Newton-Framingham, Massachusetts: -11.5 percent
- Nassau County-Suffolk County, New York: -12.5 percent
- Lake County-Kenosha County, Illinois-Wisconsin: -12.6 percent
- Memphis, Tennessee-Mississippi-Arkansas: -14.5 percent
- Charleston-North Charleston, South Carolina: -15.9 percent
- St. Louis, Missouri-Illinois: -18.7 percent
- Little Rock-North Little Rock-Conway, Arkansas: -23.0 percent
