In the previous post in this series we looked at Days on Market. In this post, we'll be looking at the Number of Closed Transactions, which we like to call the Number of Real Buyers.
The number of sales (Closed Transactions) in each price range is the same as the number of buyers who actually purchased homes and closed on them. When it comes to psychology and communicating effectively with clients, the term "Real Buyers" is more powerful.
Here are some quick tips on how you can use this important measure in your communications and negotiations:
- Creating Realistic Expectations with Number of Real Buyers: If you list a $750,000 house does your seller believe that there are buyers on every corner? Usually the seller overestimates the demand in the market. If you will track this statistic and make a simple change in terminology, it may help your seller recognize that buyers for high-priced homes may not be waiting on every corner.
Be sure to talk about REAL BUYERS as opposed to closed transactions or homes sold. Using number of real buyers instead of number of sales with your sellers can be a dose of reality. “In the last 90 days, in the price range where you want to list your home, there have been six real buyers or two per month. And it has taken an average of 175 days of marketing to find each of those buyers.” That’s powerful information! - Negotiating List Price with Number of Real Buyers: Let’s assume you have a seller who wants to list at just over $750,000 and you think the list price needs to be a bit under $750,000. You can say to that seller, “In the last six months, in the price range where you would like to list your property, there has been one real buyer per month. However, if we keep it under $750,000 we are in a price range where there have been two buyers per month. We’re doubling the odds of selling your home by listing it under $750,000.” When you can justify WHY you are recommending a particular list price and show the seller specific statistics regarding the alternate price ranges, you are educating your seller to the reality of the market. You are also more likely to receive a properly priced listing.
- Negotiating for Your Buyer with Number of Real Buyers: You can also use this tool when you represent the buyer. It’s very effective when presenting a contract to be able to show the listing agent and/or seller that, “There were only ten real buyers in this price range in the last month. My buyer is qualified, likes the house, and is ready to purchase. With so few buyers out there, doesn’t it make sense to do this deal?”
