How do we calculate the likelihood to sell percentage?
By using our historical sales data we have a general idea of when this model sells. From this we include other variables such as progress made, milestones completed, and time left in the project. Taking all of these factors into account we can create a current profile of the model and project it 60 or 90 days into the future and compare that future profile with our historical data to produce a probability of sale. This number will fluctuate up and down as variables constantly change, but will trend upwards as the model nears completion.”
We split milestones into the four buckets listed on the website: Drafting Complete, Stakeout Complete, Framing complete, and Home Complete to match with the sold before construction milestone data we track. The formula will take into consideration the amount of days to achieve the milestone and the percentage sold at the milestone. This is then compiled into an average and multiplied with 90 days into the future and therefore generate the probability the house will sell.
Why it works:
Think of two milestones in a given project. We know lots of things about the project at those two milestones, but not so much in-between. We connect the dots between the two milestones with a line and average out the numbers along the line. Now instead of having blips of data at the milestones, we have averaged out information for every day the project runs. The formula takes where the home is in construction, makes an average, and uses that information to calculate the probability the model sells.
What factors are not considered?
The historical data we use combines all data across all of our communities – therefore, the likelihood to sell in the next 90 days is not specific to each community, but rather an average across all communities the home model is sold in.