Vendor discounting is a really useful data point that can tell you a lot about the supply and demand equation in your local market. It captures the average amount by which sellers are negotiating to get a sale when selling by private treaty or a normal sale. For example, if the listing price was $500,000 but the final selling price was $475,000, that’s a vendor discount of -5%.
The number is always negative because of the way it is calculated and any amount between -4% and 0 is a strong market. This indicates that sellers do not need to discount much to get a sale in those markets. And in some cases, may even be negotiating up.