4 Stats REALTORS Use That Auctioneers Don’t
A lot of airports use their interior billboards to advertise their respective metro area’s appeal. Usually, the signs tout the city’s hospitals, higher education, technology, entertainment district, or headquarters of international corporations. Walking through Cleveland Hopkins International Airport, I saw one that fit in none of these categories.
The headline: “Within 500 miles of 43% of the US population.”
I turned to my wife and asked, “What do I do with that information?” I mean, what difference does it make how many people live within 500 miles? That had to be the first time I’ve seen anyone bragging about 43% of anything. So weird.
I’ve actually seen an auctioneer do something similar, advertising a property as only 300 miles from a metro area. I’ve also seen a local real estate agent list Colonial Williamsburg—170 miles from here—as a “local attraction.” (I’ve lived here 13.5 years and never been there.)
Statistics can be powerful tools, though—especially when they support your assertions. I’ve seen small businesses take big sales away from large firms by capturing, sorting, analyzing, and explaining data their competition either didn’t have or didn’t use.
My wife and I live in a fast-growing subdivision in my area. People who don’t live in our subdivision get on our neighborhood’s Facebook page to ask if anyone’s thinking of moving. It’s in high demand because it’s the closest new subdivision to the schools in a coveted district. Also, we have the lowest property tax rates in the area. So, buyer agents are looking for sellers; and one local REALTOR tried to use statistics to tease us to leave.
If you’re auctioning real estate, you should consider using the statistics leveraged on this postcard in your seller presentations. In the seller proposals and presentations I’ve been asked to design over the last 13 years, I don’t need all of the fingers on one hand to count the times I’ve seen any of these used.
Number of Nearby Properties Sold
Only an absolute auction guarantees a sale, but you can give all sellers confidence in the market to bring buyers—if this number is significant. If it’s a low number, you can use that to educate sellers and massage their expectations. If you have a breakdown of properties auctioned vs. properties listed, this stat increases significantly in value.
Local Market Sales Rate
This information is apparently easy to find, because I’ve had multiple REALTOR friends show me this data at different times. This number compliments the first statistic and can give context to expectations. While a metro area or county might be trending one way on the aggregate, a specific slice of it may not. This is true of commercial, industrial, and agricultural real estate, too—even though the statistics might be harder to find or less concentrated than residential numbers.
Average Days on the Market
If this number is high, the time benefit of an auction will seem that much more valuable. If this number is low, the timeline of an auction is actually longer. In that case, you have to sell the competitive-frenzy aspect of auctions. Also, knowing this number might help you in your due diligence to know whether you should take the auction in the first place. (This number might be skewed a bit for our neighborhood, since builders often list their homes very early in the construction phase.)
List Price to Sale Price Average
This stat can indicate that sellers have good sales agents and/or that local comps are reliable, or it can suggest the opposite. If the number is above 100%, you can make the case for the value of a competitive-bidding marketplace. If it’s drastically below 100%, you can discuss how well-marketed auctions—not comps and appraisals—determine market value.
Auctioneers regularly tell me how much they want to work with REALTORS. Maybe they should first pursue working with their statistics.
Postcard scanned. Stock cover image purchased from iStockPhoto.com.