R.E.S.T. It’s About The Math – The List to Sell Ratio
Hey Everyone and welcome to our 3rd in a series we are producing around the career that we love… real estate.
This is going to be your source for some real estate straight talk – the real deal, real scenarios, myths and myth busting, the rules, the ethics, the process, the expectations – what you really need to know. So here we go!
List to Sell Ratios….Production numbers…Oh Gosh….it’s MATH!
We were recently invited to a home as part of the owner’s interview process for the job of selling their home. We were very impressed with how prepared these home owners were for the meeting.
Everyone wants to know how you are planning on marketing their home and most REALTORS® will have a comprehensive plan of attack.
It made us think about the most important questions that a home owner should be asking their potential REALTOR® but rarely do before making their choice.
There are two big questions that come to mind;
- How many houses have you sold this year?
Not how many the team has sold…
Not how many the brokerage has sold…
Not how many the company has sold…
How many have YOU sold – by yourself!!
The real estate market changes fast and is made up of so many business models that if an agent is selling one house every two months, they may not be up to speed on the current market conditions.
Just because they have been in real estate for 20 years doesn’t mean that they have the greatest experience. Conversely, if they work on a team of 17 people and can say the team sold 100 homes last year, that breaks down to almost 6 homes each – the national average. Not bad at all, but market knowledge and experience only gets better if you are selling 15 – 20 homes or more per year. That seems to be an industry understanding for having your fingers on the pulse of the market.
- What percentage were Listings, and what percentage were buyers?
This is a follow up to #1 in the sense that the skill set can vary between someone who deals with Buyers 80-90% of the time, and someone that deals with Sellers. Finding a good fit would be a REALTOR® that deals with both – they have solid experience selling homes, and also have current knowledge about what Buyers expect and are willing to pay / negotiate for/ need.
- What is your List to Sell Ratio?
This is simply a test of our negotiating skills. When we list a property how close to the asking price are we getting?? Let’s set out an example…
You are going to meet with REALTOR® A and REALTOR® B
REALTOR® A tells you their List to Sell Ratio is 96%, well…that sounds good. I mean from our school days, we all equate 90+% as a A or A+ right?
REALTOR® B says their list to sell ratio is 99.8%.
Already we want the person that is telling us they have an A++ in selling right?
And keep in mind, a lot of this is going to depend on the type of real estate market we are in. For the sake of argument, let’s say it’s a Seller’s market – where there are lots of Buyers and not enough homes on the market.
On a $400,000 home, 96% is $384,000.
99.8% on that same home is $399,200
That is $15,200 difference!!! That is HUGE!
That’s the difference between selling your home and moving on, and selling your home and getting a 2 WEEK CARRIBEAN CRUISE!
There are several different business models and agents charge different amounts. Do yourself a favour and get a great negotiator rather than the cheapest commission. You’ll R.E.S.T easy in the end!
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