Arriving at an optimal list price or communicating why a seller may need to adjust their price is no easy task, especially today. Of course, you would use all of the traditional statistics drawn from recent comparable sales and current listings. However here’s one statistic that is equally important to educate your sellers on: The % of homes not selling each month.
No doubt you’d agree that most sellers believe, especially in a hot market, that any property that is listed gets sold. As a real estate professional, you know this is not true. In fact, the percentage of homes listed that are in fact NOT selling each month will shock most sellers.
Below are 3 scenarios that you can draw on to illustrate months of inventory as well as the % of homes selling in your market – and inversely, illustrate the % chance of your seller’s home not selling.
|Scenario 1||Scenario 2||Scenario 3|
|Seller’s Market||Balanced Market||Buyer’s Market|
|1) Active Listing (from your Board)||5000||5000||5000|
|2) Sales (from your Board)||2500||1250||625|
|3) MOI (Active Listings/Sales)||2||4||8|
|4) % of Homes Selling (Sales/Active Listings)||50%||25%||12.5%|
|5) % Chance of NOT Selling (100% – % Selling)||50%||75%||87.5%|
Check out my short video for an in-depth look at how to communicate these statistical concepts to your sellers and potential sellers to help price homes properly.
Pro Tip: Use these same statistics when you need to educate your sellers on the needs for a price adjustment!
Remember, it’s a beautiful life, make it count.