# Sold in 3 months or less? Here's why.

By
Real Estate Agent with Coldwell Banker Residential Brokerage

Game Changer® is an MLS-based, price-point focused, market information system.
It uses the flow of money, time and inventory to analyze residential real estate markets, uncover opportunities for buyers and sellers, and meet client objectives. Use the links on the right to see more Game Changer examples, and be sure to subscribe to my blog in order to watch the game change.

You have 100 cases of Pampers in the back room, and sales volume is 10 cases per week. Einstein you don't have to be to figure that it will take about 10 weeks to use up the inventory. Similar math is used in the real estate business: 10 houses are for sale and the market absorbs one house per month. Therefore, it will take 10 months to sell the inventory of houses. Data like this is useful when comparing markets.

What it isn't useful for is giving homeowners reasonable estimates on how long it will take to sell their homes. This is because the data fails to include essential information...information that the Game Changer model is built on.

The first two items to get entered into the Game Changer system are the price point of the seller's house and the seller's desired time to sale. The next entry is an appropriate date range that will identify sales in the seller's price point. A date range should be selected that is broad enough to find a reasonable number of sales in the price point and, at the same time, is reflective of current market conditions. For demonstration purposes the second half of 2009 was selected. Once those three items have been entered, the estimate is prepared.

Seven houses in the seller's price point sold during the 6 months ending 12/31/2010. Rather than being interested in all 7 houses, our focus will be on that sold in 3 months or less; there were 6. Finally, there were 6 active listings (plus the seller's listing) in the seller's price point; they represent the competition. Put it all together and a sale within 3 months is a mathematical certainty (100%). This is because there were 6 benchmark houses in the seller's price point...all of which sold in 3 months or less...and there are 6 active listings in the same price point. It's reasonable, then, that the market should be able to absorb the active listings, as it did the benchmark houses.

This above example lays out very favorable market conditions for a seller. Obviously, not all price points are so favorable, as the following example shows:

In this case, there is only a 40% chance of meeting the 3 month sales goal, because of a high inventory of competitive houses. The math works like this: there were 4 benchmark houses that sold in 3 months or less. Because of that recent history, the assumption is that the market will absorb 4 of the 10 listings (40%). So, for our seller to meet his sale objective of 3 months, his house must be one of those 4. With that understanding, a solid plan can be developed that will give the seller a good chance to get her house sold within 3 months.

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Interested in west Essex County, NJ, or surrounding towns in Morris and Passaic Counties? Game Changer knows things you should know...things like where deals are, and how to get asking price. But there's a risk? The risk is that you don't reach out to me because you think Game Change is a bunch of hype. If that's you, subscribe to my blog right now so you can see for yourself that Game Changer is the real and that I am, too. Then contact me.

However, if time isn't on your side then drop the dime and let's talk. It's important.

Posted by

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Brian McCabe
Coldwell Banker Residential Brokerage, Caldwell, NJ, 07006
Cell: (973) 865-1863  email:
bmcccabe@wessex-homes,com
Game Changer...be prepared for surprises

Ryan Smith
Keller Williams Energy Real Estate Brokerage - Pickering, ON

Great Post! I wish home sellers would think this way more often.

Jul 06, 2010 12:25 PM
Pam Guthrie
Seaside Realty Company - Myrtle Beach, SC
Seaside Realty Co. Owner/Broker In Charge, REALTOR

Speaking of "EINSTEIN"... I came across this quote that fits your article when it comes to a Seller having the right mentality (and tools of knowledge from a QUALIFIED REALTOR)...

"A man should look for what is, and not for what he thinks should be."
Albert Einstein

Jul 06, 2010 12:30 PM
Brian McCabe
Coldwell Banker Residential Brokerage - Caldwell, NJ

Hello, Ryan. I agree with you about sellers. I would only add that I believe sellers would think this way a lot more if they saw the logic behind it.

I owned an advertising agency in a previous life and if I went to a client who wanted my input on a new target audience for his brand and I said I think it should be men 25-34, personal employment income \$100,000+ etc., he would have said show me the numbers. It's not about trust or knowledge or experience. It's about there being a lot on the table and the guy wants to sleep at night. In other words, McCabe told me it was the right target audience doen't hold much water...even if it was correct.

That's the way it is with many...not all...sellers. They want to feel that the decision to sell at a particular price and in a particular time frame is based on facts and not assumptions. That will certainly be the case as we inceasingly deal with Gen X and Y'ers. They don't take anything for granted, and who can blame them. The age of Trust Me is over, at least when dealing with them.

Jul 07, 2010 04:26 AM