I have noticed on several occasions that a "For sale" sign outside a property in my area has been replaced with a "Sold" sign, which is then replaced with a "For sale" sign again when the planned sale falls through. A debate raged yesterday on HousePriceCrash as to whether those were really "Sold" signs or just "Sold subject to contract" signs, where the words "subject to contract" were in tiny letters underneath.
Uncle Tom at comment 66 came up with an ingenious way of showing that the phrase "Sold subject to contract" was being abused wholesale.
Step 1. Go to www.houseprices.co.uk and type in a postcode. Then choose the option '100 results' from the drop down box (to speed things up) and see how many properties have been sold in the last twelve months by scrolling through the pages. Taking the postcode E11 at random, we see that 318 properties sold in the twelve months 22 July 2008 to 21 July 2009.
Step 2. Go to Rightmove, enter the same postcode, click 'For sale' and then 'Find properties' and it tells you that there are currently 236 properties for sale in E11.
Step 3. Then click "Include Sold STC" and "Update results", which now gives us 368 properties.
Step 4. Deduct your answer from Step 3 from your answer from Step 2, which gives us 132 properties which are Sold STC.
Step 5. Divide the number of properties Sold STC (132) by the number of properties actually sold in a year from Step 1 (318) and multiply this by 12 months. In this case, we get 4.98, in other words, the time lag between a property being described as 'Sold STC' and it actually selling is on average five months, which strongly suggests that estate agents advertise properties as 'Sold STC' as soon as there is the first whiff of interest (and supports my own impression that estate agents see 'For Sale' and 'Sold STC' as more or less interchangeable).
Bonus Round: you can also divide the number of properties for sale (368) by the number sold in a year (318) which gives you an average time on the market of fourteen months. Minus off the five months from initial offer to completion and that means that vendors have to wait for nine months before their first offer.
The economics of the bung
7 minutes ago
6 comments:
Mark,
Re For Sale and STC boards:
As an ex estate agent, unless things have changed, once an offer was accepted it gets changed to STC.
This is no more than a 'marketing ploy' in that the public are swayed by STC/Sold boards than For Sale as it leads the public to believe that that particular agent is more successful.
WFW, thanks for inside info. Of course, the marketing ploy backfires most spectacularly when the 'Sold' sign is replaced with a 'For sale' sign again!
For my first accountancy exam at university, in the days before I became a saint, I wrote: "I can't f---ing do any of this," and that was the end of my bid to become an accountant.
How do you do it, Mark?
JH, the left hand column is for "To" (debit) and the right hand column is for "From" (credit). That's accounting in a nutshell.
Multiplying and dividing (as in the above example) goes way beyond what most accountants do.
I looked at the early part of an accounting text book recently. It was quite striking that almost all the intellectual difficulty stemmed not from the subject matter, but from the pathetically poor attempt to explain it. It ain't Thermodynamics, it's just Adding Up!
D, to be fair, at the end of the year you have to do some subtracting as well to get it all to balance.
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