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KPI for Measuring of Average Length of Time per Property Sale posted in category Real Estate

WinningKPI - Real Estate - KPI for Measuring of Average Length of Time per Property Sale posted in category Real Estate Oana Boteanu This KPI is for measuring the average length of time it takes for a property to sale. This is calculated by dividing the total time the properties have been on sale by the total number of properties sold in a given time period (e.g. 1 year).
This KPI is a very important tool to measure property sale performance, as the lower this KPI is, the better the performance is ranked. It is in the company’s interest to sell the property as fast as possible, as every day on the sale market incurs costs (marketing, electricity, taxes etc).
However, this KPI only gives an average measure. For instance, if a few houses sell very quick and others take very long; this KPI will not give an accurate estimate of the sales performance. A more in depth analysis can be made on factors that increase property sale, such as sales performance per property type (e.g. flats vs. houses, high value vs. low value etc).

Formula:
Total number of days on the sales market / Total number of properties sold

For example, if a company has 20 properties for sale in a year, and they have been on the market for a total of 300 days (sum of days each property has been on the market):
300/20 = 15 days, hence each property took on average 15 days to sell.

KPI Units: time (days, months)

KPI Time Frame: Update quarterly or annually

Posted by Oana Boteanu | Help to protect community: Flag for moderation

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Here are comments:

KPI Expert This KPI is dependent on many factors, such as property location, property time, how competitive the price is, how high the demand for that kind of property is.
However, the lower this KPI is, the better.

Research shows that on average property sales at any time between 6 weeks and six months, once again, depending on the factors above.

Example:

A real estate agency measures this KPI over a year period

Total number of properties sold: 4
Total number of days on the market:
300 (one for 100 days, one for 150, and two for 25 days each)

Average length of time per property sale:
300/4 = 75

Therefore, the result shows that the average time for the agency to sell a property is 75 days (2.5 months).

Oana Boteanu | + | September 13, 2012 at 10:25 am

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