Thursday, October 21, 2010

How many people does it take to sell a house?

Or another title – “At which point in the “I’m going to buy a house” cycle should I get excited?”

Author’s note:  This post is not a complaint – I love what Heather & I do here at The Phoenix Agents.  But I do find myself missing the excitement which used to come with every phone call…

I meet a lot of people who are “ready to buy (or sell) a house.”  But only about 1 out of 5 of these homebuyers actually get into the car to look at houses (or invite me over to talk about selling their home.)  Once they get in the car, probably 3 out of 5 of them will actually write an offer on a house (or list their house for sale), eventually.  For those who write offers, 4 out of 5 of them will get accepted and open escrow, and 4 out of 5 of these escrows will eventually close. *

So let’s do the math:

1 person “ready to buy”

x 20% chance of getting in their car to view homes

x 60% chance of writing an offer

x 80% chance of getting offer accepted

x 80% chance of closing escrow.

* These are *very* rough estimates, and probably too conservative.

= each person “ready to buy” has a 7.68% chance of closing escrow.  Or, put another way, for every 13 people I meet who are “ready to buy”, 1 will close escrow (and remember, Realtors only get paid when the escrow closes.)

I don’t mind the long cycle or the low percentages.  In fact, I’ve built my entire business model on the principal of “it doesn’t matter whether it takes 2 weeks, 2 months or 2 years, when you’re ready I’ll be ready to help.”

The problem is.. I like to get excited – to feel that rush of happiness, exhilaration, achievement, and helpfulness – about meeting new clients.  I want to feel that way from the first phone call all the way through to the closing table.  But I’m finding it more of a challenge these days, knowing that 12 out of 13 of them won’t actually complete the process.

I miss my early days in the business, when I was naive enough to get excited about every phone call…

Your self-reflecting to find his inner child Realtor,

Chris Butterworth