quality listing

I preach this stuff a lot. Eventually though, everyone will listen. Pricing is important. Here is a chart of the last 12 months of sales in Grundy County (single family) and the relationship between days on the market and percent of original list price obtained.

Notice the obvious downward linear trend!

What happens if we segment that graph in two parts, one sales from 1-90 days on the market and the other from 91+? You’ve long known about my quality listing approach to listing and selling property, the first graph contains all eligible single family houses for that, the next does not.

Of houses sold in 90 or fewer days, 58.99% of them were “Quality Listings” (again, don’t misconstrue that to mean the other houses weren’t quality or that those agents didn’t do a great job. It’s just a metric I use to show which were truly exceptional. The below graph shows that as you go on in days, you get further from 100% of list price but by a ridiculous margin…..

…..however, when looking at sales 91 and more days from the time of listing, you see that amount of original list prices obtained are harder to rely on. This is why I tell my clients, on listing presentations, that I start losing sleep after 90 days.

The data in this post was obtained exclusively from Grundy County, IL. I’d be willing to bet you large sums of money, however, that it works for Will, Cook, LaSalle, Denver, New York, etc.

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A couple weeks ago, I explained my ideas on the Quality Listing. One thing we didn’t look at was how many of said Quality Listings were actually out there. In the past 12 months (4/19/10 to 4/19/11) we have closed 62 single family homes in Coal City, Diamond, and Carbon Hill. Of those 62, a mere 12 have been Quality Listings (with 4 more pretty close calls). That represents 19.34% of sold listings as Quality Listings. I’d say that is a figure that’s about right, just guessing. The top 20% of something can be considered quality. If half the listings to sell qualified, there’d be nothing special about it, right?

Check out the 488 Quality Listings last 12 months (4.19.11). It’s a nice rundown of homes sold and how they become QLs. Remember, the percentage of original list price has to be 95% and under contract in 90 days or fewer. So the house at 380 Kankakee, which went under in 66 days at 94.93%, just missed….but 95 is 95. If that house would have sold for $100 more, it would have been an “official Quality Listing” (statistics-wise). In the eyes of the seller I’m sure it was a great job done. What do you think? Does the top 20% of homes sold sound about where you’d expect the number of Quality Listings to be? Higher? Lower?

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Today we look at if listings sold are Quality Listings or not. Last week I wrote about the idea of a quality listing and I’d like to show a number of homes sold and whether or not they qualify as quality listings. Click that link and scope out the attached spreadsheet (or maybe I’ll figure out all the plugins and get in embedded here).

Houses sold that qualify for percentage and market time are highlighted. Remember, under my rules a house has to qualify under BOTH categories to earn Quality Listing status. Therefore, the homes on Jonquil or Half Moon Bay do not qualify because they each sold for under 95% of original list price. Likewise the home on Ascot sold in 105 days, 15 too many to qualify. Now, in each of these 3 cases, the seller was a very happy person/bank/couple, etc. but they just missed out. Think of it as your kid’s report card. You’re pretty happy if he/she gets a B+, right? It’s good work, it just wasn’t quite A material.

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It’s Opening Day and all around this great land of ours, baseball junkies like me are psyched and ready for the 162 game season to get rolling. I have found a way to connect my passions for baseball, statistics, real estate and general nerdiness. It’s the Quality Listing.

In baseball, there is something called a Quality Start for starting pitchers. One has a quality start when he goes at least 6 innings and allows

No one has more quality starts in baseball in the last two years than Adam Wainwright- unfortunately for Adam, he underwent surgery and won't be pitching in 2011.

3 earned runs or fewer. So 6 innings, 4 earned runs- not a quality start. 8 innings, 2 earned runs- quality start. Get it? Good. If not, you can always check out the quality start wikipedia page for clarification. (Though I suspect you’d probably rather just exit without treading further into nerd-dom.)

I wondered long ago by what criteria I could relate a grading principal like that to my listings. Like baseball starts- not all listings are successful. And those that are technically successful (any closing) are not always awe inspiring.

So here’s what I’ve developed as the Quality Listing to make my parallel (and a system that I judge my performance as well as that of my competition on):

  • Closed listing to sell for 95% or better of original list price and go under contract in 90 days or fewer.

The fact that the listing closes makes it a possibility to be a quality one, just like a pitcher taking the mound and throwing out the first pitch of a game. The time allotment of under 90 days is similar to the 6 inning minimum. In my line of work, fewer days equals better whereas more innings is better for a pitcher. The performance based part has me (or any agent) selling a house at 95% of what it is originally listed for.

So if a house hits the market at $200,000 and sells in 25 days at $195,000 (97.5%) it is a quality listing. If it sells in 91 days or more or at $189,999 or less it is not. It doesn’t, by any means, insinuate that a listing agent did a poor job- just that it wasn’t, by this criteria, GREAT (or quality).

What do you think? Could I convince all real estate agents and brokers to use this, universally, as a grading/ comparing method? Even if listing agents were willing to use this, would they ever go public with the results?

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