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Sellability

By
Real Estate Agent with Weichert, Realtors

Sellability

 

There are Four major components that determine whether and how quickly a house will sell:

•1)      Location

•2)      Quality of house in comparison to its direct competition

•3)      Price

•4)      Number of buyers that know about the house (via Internet and Professional Marketing)

 

The first three comprise a factor that I am calling "Sellability".  In any given market, if there were a hundred homes available for sale, you can pretty accurately rank them from one to a hundred, indicating the likelihood of the house selling and how fast.

 

In the best of markets (seller's market), the following chart is an approximation of how long a house would remain on the market - Note: these percentages are to illustrate a point - the exact numbers vary significantly depending upon area and how "hot" the market is in that area.

 

Top 10 %         - likely to sell within 1 week, many with multiple offers

Top 11-25%    - likely to sell within 1 month, several with multiple offers

Top 26-50%    - likely to sell within 3 months, multiple offers can happen but not likely

Top 51-75%    - will take more than 3 months, some will not sell at all

Bottom 25%     - will not sell

 

In a poor market (buyer's market), we can see how different the picture becomes:

 

Top 10%          - majority will sell within 1 month - a few will have multiple offers

Top 11-25%    - likely to sell within 6 months, multiple offers unlikely

Top 26-50%    - many will sell but may take 12 months or more - the sellability factor becomes somewhat random (i.e. 50% house may sell before the 30% house) because of time on market and agent showing preferences

Bottom 50%     - a few will sell, most will not

 

Some key points:

•1)      Even in a great market, there are houses that do not sell

•2)      In the great market, houses that are lower in ranking will automatically improve their ranking over time because the average price of homes is increasing by double digit percentages - a big factor in why agents will take a listing that is overpriced.  Conversely, houses in a poor market may drop in ranking if there are no price adjustments.

•3)      Sellibility can be improved.

•a)      Location cannot be changed, But

•b)      Quality of the house can be improved - takes time and money

•c)      Price is the quickest and most reliable solution

 

Now we must consider the Agent/Broker role in this process:

1) Professionalism - It is the agent's duty to determine a price that will get your house sold in your preferred timeframe.  A price that is too low will place the house well within the top 10% of the ranking.  At that point it will sell irregardless what else the agent does.  But you may be losing some money in the process.  The agent's commission is supposed to be recovered in the sale price of the home - via their ability to get a price for your home that is well above what you could get by doing a For-Sale-By-Owner.  In short, in this scenario, the agent is not doing a professional job. 

A price recommendation that is too high either means the agent is not competent in pricing or is misleading the client in order to get the listing (a professional ethics issue in that we all are sworn to not intentionally mislead a client.).  As you can see, the best agents are the ones that can price you low enough to sell, yet high enough to pay for their services and then some.

2) Internet Exposure and Marketing.  This gets us to the fourth factor that determines how quickly your house will sell.  Most agents are comparable in how they will use the MLS services and the Internet.

What separates some from the crowd?

•a)      Their ability to have your home stand out on the internet.

•b)      Their ability to gain a wider audience via both the Internet and MLS services.

•c)      Their ability to reach more people and get more people to your home via marketing campaigns and open houses.

•d)      Their ability to get a buyer to present an offer.

•e)      Their ability to be a strong negotiator in your best interest when an offer is presented.

 

Give me an hour of your time and I will show you all the reasons why I am the agent described above.

www.RobertSmithRealtor.com

Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

Nice post but maybe a bit long.

Jan 20, 2008 04:48 AM