Calculating the Top Ten Percent of Your Market
Step 1: Define Your Market Area
If you are in a small or medium-size market, use ALL of the sales from your local MLS.
Step 2: Find the Total Number of Sales in Your Area
Run an MLS report asking for a total count of all single family, condo and co-op residential properties sold and closed in the last 12 months for the relevant market area(s), as determined above. Call your local MLS if you have questions about how to get this information.
Step 3: Determine How Many Properties Make Up the Top Ten Percent
Take the total number of properties sold and divide it by ten. This will tell you how many properties make up the top ten percent. For example, if there were 1000 properties sold, 10% would be 100 properties. If there were 500 properties sold, the top 10% would be 50 properties.
Step 4: List the Transactions from Highest to Lowest Price
Once you have determined the number of properties representing the top 10% of closed sales in the last 12 months, you should be able to run an MLS report that lists those sales, or all sales, from the highest price to the lowest price.
Step 5: Find the Qualifying Price for your Top Ten Percent
Take the number of properties you determined in Step 3 and count down the list by that number.
If you found that there were 100 transactions in the top ten percent, then find the 100th most expensive sale on the list. The sales price of this transaction is the starting point for your top ten percent.
For example, let's say you sort all 1,000 of the sales by price and find that the most expensive sale price was $3.6 million and the least was $262,000. You find the 100th sale on the list and see that it is $645,000. This is the qualifying price for your market's top ten percent.
Remember, to earn the designation, the qualifying properties must be in your market's top ten percent or $500,000, whichever is HIGHER. So, even if your top ten percent starts at $490,000, the sales you submit must be $500,000 or more!
Documentation
Once you’ve determined the top 10% value, follow the instructions on the application form. Be sure to attach documentation for each of your closed properties. This can be a company report, MLS print-out showing the property sold and you as the agent, or the actual closing paperwork.
Remember your manager or company owner must sign your application form and his or her signature must be notarized.
