Yeah, yeah, there are dozens of metrics (quantitative benchmarks) for judging how good/effective Realtors are (Brokers, too).
For most consumers (and not a few Realtors), however, there’s really only one number that counts: sales.
No surprise, the agents who sell the most homes each year proudly trumpet that fact in their email, direct mail marketing, on social media — and every other way they can think of.
Quantity > Quality
Are sales relevant?
But, they’re not dispositive.
Toyota sells a lot more cars each year, but I’d still rather drive a BMW.
McDonald’s outsells Manny’s, but guess where I’d prefer to go for my anniversary dinner?
H&R Block prepares more returns — but, that’s not who does my taxes.
You get the idea.
Realtors who sell 50 (or 150!) homes a year do that by employing an army of assistants.
Once clients are under contract, it’s those folks — not the agent — who clients often find themselves dealing with.
Realtor Metrics, Take #2
What other, performance-based benchmarks are there for evaluating Realtors?
Four popular ones are: 1) “Sales Price as a % of Asking Price”; 2) “Average Days on Market”; 3) ratio of “Sold” to “Expired/Cancelled” listings; and even 4) “Average Sales Price” (shows which area(s) and market segments the agent focuses on).
While each of those can be useful, each has its failings, can be distorted by extraneous factors, and can otherwise be misleading.
Instead, I’d argue that perhaps the most valuable statistic of all for evaluating listing agents is much more obscure (and not publicly available): the agent’s average number of showings per listing.
“The Too-Fast Sale”
Here’s my logic:
A home that sells after only 2-3 showings** — perhaps to the listing agent’s own Buyer — really hasn’t been exposed to the market.
And, if a house hasn’t really been exposed to the market, it’s impossible to say if the price the Seller immediately accepted reflects fair market value.
At the other end of the continuum are houses that remain unsold after dozens of showings.
Buyers’ unmistakable message to such Sellers?
Their home is overpriced.
In turn, that means either: a) the listing agent goofed; or b) their client did (most likely scenario: the client insisted on overshooting the agent’s price guidance).
Showings Sweet Spot; “Goldilocks Number”
All of which is why I’d suggest that the optimal number of showings** prior to sale is about a dozen.
That tells you that enough Buyers saw the home that, had it been underpriced — especially in an ongoing Seller’s market with scarce inventory — it would have triggered a price war (i.e., the home would have been in multiple offers).
At the other extreme, dozens of showings and no offers on an otherwise well-prepped, well-marketed home can only mean one thing: a too-high price.
Realtors who know how to skillfully walk that market/client tightrope . . . are the ones you want to work with.
**Exposure on Broker Tour: in the Twin Cities, local agents hold new listings open each Tuesday from 11 a.m. to 1 p.m. A well-marketed, well-attended Broker Tour is equivalent to multiple showings.