Key point — The Contract-to-Close Ratio measures what percentage of contracted properties reach the closing table. Industry average is ~85%. Below 80% signals problems in buyer vetting, pricing, or deal quality that need immediate attention.
The Metric
Contract-to-Close Ratio = (Closed Deals / Total Contracts) x 100. It reflects both execution quality and deal selection discipline.
Benchmarks
| Ratio | Assessment |
|---|---|
| 90%+ | Excellent — highly efficient closings |
| 80-89% | Healthy — consistent with industry average |
| Below 80% | Needs review — likely issues with weak deals, due diligence gaps, or buyer list quality |
The Process
- Secure the contract: Agree with the seller, typically below market value to create room for assignment profit
- Find an end buyer: Market the deal to cash buyers or investors willing to buy the contract or complete the purchase
- Close: Finalize the transaction, earn the assignment fee or margin
Contracts that fail to close typically fall through due to inspection issues, title problems, unrealistic pricing, or insufficient buyer demand.
Why It Matters
- Revenue forecasting: Project actual income from your current pipeline
- Process optimization: Low ratios pinpoint where deals are falling apart
- Scaling: You cannot scale a business with a leaky close pipeline
