What is Sell-Through Rate (STR) in Real Estate?

Good sell-through rate is a measure of strong performance and revenue results—in various industries, including real estate. 

Realtors with a high sell-through rate do an excellent job moving the properties on their list. So, whether you’re a homeowner or a business looking to partner with a real estate agent, considering their sell-through rate is a savvy way of determining their knack for driving results.

Here’s everything you need to know about this metric and how to calculate it. 

What is Sell-Through Rate (STR)?

Sell-through rate (STR) is the ratio of inventory sold versus inventory received in a certain period, calculated in a percentage.

If a real estate agent receives 20 new properties to list in a financial quarter and sells 19 of them, they have a very high sell-through rate. In simple terms: they’re selling off most of their inventory. On the other hand, if that realtor were only to move 5 of their properties, their sell-through rate would be low. “High” and “low” are relative to benchmarks. Generally, an STR of over 80% is considered high or excellent.

This metric or key performance indicator (KPI) serves as a measure of sales performance. A company that sells products might use this KPI to determine the items that are most popular with their consumers and which don’t drive customer demand and result in excess inventory. For a realtor, it’s a marker of how efficient they are at selling properties. 

How to calculate Sell-Through Rate

The sell-through rate calculation is simple: the number of units sold divided by the number of units in inventory. In the case of real estate, swap out “unit” for property. 

Remember that sell-through rate is calculated for a given period. If you were to calculate the STR for a realtor over a year, it might vary from their rate in a busy period, like spring, which experts cite as a high-demand time for buyers.

Formula 

The sell-through rate formula is as follows: 

In the formula: 

• Units sold refers to properties (listings) the real-estate agent sold in a certain period of time, like a quarter. 

• Units in inventory refers to properties (listings) the real-estate agent received in a certain period of time. 

Examples

The following examples apply the CTR formula to real estate scenarios. 

Example 1, high STR: A realtor receives 18 homes to sell in the first quarter of the year, and they are able to sell 16. Dividing 16 by 18, per the formula, gives an STR of 89 percent (rounding up). 

Example 2, low STR: A realtor receives 18 homes to sell in the first quarter of the year, and they are able to sell only 10. Dividing 10 by 18, per the formula, gives an STR of 55 percent. 

What effects a realtor’s STR?

Several factors can affect a real estate agent’s STR. Even an experienced, talented realtor can have a rough season. Here are some of the top boosters and mitigators for making sales. 

Better sales, and in turn high sell-through rates, can often be attributed to: 

• Top-notch marketing: Realtors who ensure properties look appealing in photos and work to reach a wide audience of buyers have a better shot of making quick sales. 

• Real-estate market insights: Agents with their finger on the pulse of the market are well-equipped to make sales by listing homes that appeal buyers. For example, a realtor might recommend that a homeowner perform certain renovations that buyers in the area have been looking for recently. Or an agent might suggest a price boost or drop based on sales trends.

• Reputation: A real-estate agent well-known enough to be sought out by buyers may have an easier time of selling a home thanks to a flourishing client base.

  

Fewer sales, and in turn low sell-through rates, can often be attributed to: 

• Difficult-to-sell properties: Homes with noisy neighbors or other undesirable surrounding conditions, niche designs, or needed repairs can be more challenging to move. 

• The wrong price: Poor advice from an appraiser or agent or faulty research on behalf of the buyer can all lead to pricing a home incorrectly. A price that’s too high can be off-putting, as can be a suspiciously low number.

• Lack of motivation: An agent who’s not eager to make a sale, inadequately building a client base, networking with other realtors, and performing marketing tasks, may take longer to sell a home. 

• A slow market: Factors like high mortgage interest rates and inflated market pricing trends can slow real estate sales. Even experienced agents hustling to make sales on excellent properties can flounder in this kind of market. And since STR is calculated for periods, a home that doesn’t move in the time calculated for can lower the percentage. Suppose a realtor is calculating their STR for January through March and they received a home in February but couldn’t sell in the calculation period. That property drags down the STR calculation (even if the agent is in the process of successfully selling the home and moves it off their inventory in April). 

Titus partners with the best agents in your area

Titus helps homeowners get their property in tip-top shape before putting it on the market. This way, both the seller and their agent have a good chance of moving the property quickly and at a lucrative price. Plus, by offering closing lines of credit (CLoCs), a unique financing product, Titus provides home sellers with funds for renovations, staging, and repairs—whatever it takes to help ensure a sale. 

Central to Titus’ approach is partnering with top agents who can advise home sellers on making a successful sale—and pull it off. We look closely at agents’ STR to determine their efficacy, seeking a percentage higher than 80 percent. Learn more about how Titus works here.