Market Insights: How the ‘Rule of 13’ builds seller confidence
In the Market Insights column last week, I talked about how you can win the tug of war taking place between Summit County buyers and sellers. In summary, those who win have 1. Confidence; 2. Realistic Expectations; 3. Strength; and 4. Experience.”The term ‘Sales’ is a numbers game.” It is an axiom salespeople are taught day one on the job. Having information and knowing the numbers gives sales people and real estate sellers confidence. In the mountains, the most important number for every person selling a property is … (drum roll) … “13.” Thirteen has been proven over decades. I’m talking about showings. Sellers, you should be keeping track of the number of showings you receive and, if you reach 13, take prompt action.Data published by the National Association of Realtors states that a residential property priced correctly for the market should receive at least one offer for every 10 showings. Yes, I know that is not 13. Why? Resort markets are different. Buyers in resorts tend to look at 30 percent more properties before they make an offer. How do I know this? I interviewed a number of Realtors who have earned the Resort & Second-Home Property Specialist designation across the USA. Next, I reviewed data from the sales I have represented over the years. The conclusion – in Summit County, for every 13 showings of a property priced “in the flow” (explained in a previous Market Insights column – email me for a copy), the seller should receive one reasonable offer. There are two more things to take into consideration with the ‘Rule of 13.’ The pace of showings needs to be in line with the season. For example, most properties I marketed this past summer have two showings a week. In October, I expect showings to slow down to two or three per property in the month. If you aren’t having consistent showings, you have a problem that needs to be addressed right away. Also, know the ‘Rule of 13’ will vary based on the volume of sales taking place in the market. If the number of sales is way down, you’ll need more showings. In 2009, when the market was moving at a snail’s pace, the number was 16 or 17. On the other hand, back when the market was red hot (back in the mid-2000s), the number was down to nine or 10.Knowing what to expect builds confidence. And confidence is a key ingredient for sellers to obtain the highest possible price the market will bear.
Sellers – in this market, if you hit the magic 13 showings without an offer, it is time to lower your price. Buyers – by the time you have seen 13 properties, you should feel very comfortable about making an offer.Daniel Webster Johnson is the 2010 National Associations of Realtor RSPS of the year. He is a broker associate at Resort Brokers Real Estate in Breckenridge. Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com. *Data provided by the Summit Association of Realtors.
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