You're absolutely right. I keep making that point over and over again in answers I post.
I see plenty of cases in which a property starts off at $500,000, gets reduced to $470,000, gets reduced again to $450,000, then sells for $427,500--a 5% reduction from $450,000. What goes unnoticed by many is that's really about a 15% price reduction from the original listing price.
A further complication is that the sales price doesn't reflect the next to seller (even ignoring the commission). That is: Often the buyer will ask for a "seller subsidy" to help pay closing costs, or perhaps for remodeling. Whatever, it can run up to 3% in many cases. So, using the example above, after the seller subsidy, the house really sold for $414,675 . . . or about an 18% reduction from the original listing price.
Using a figure like "95% of listing price" is both dangerous and meaningless for another reason. It's based on the false assumption that the listing price is an accurate reflection of market price.
And finally, that 95% is an average. Of necessity, that means multiple homes were included in coming up with the number (even if that number was accurate . . . which it isn't.) Any one home is likely, statistically, to be either above or below the average. If you were buying 25 or 50 homes, then the average might mean something. But when you're buying just one, you have no idea where under that bell curve your prospective home falls.
Excellent question; excellent point.