Days on Market:
What It Means and Why It Matters to Buyers AND Sellers
Days on the Market, usually abbreviated as DOM, is the time between when a home is first listed on the local multiple listing services (MLS) and when it’s been sold or taken off the market. In the real estate game, a newly listed home will usually go for or above its asking price. But as the weeks tick by and there’s still no offer agreeable to the seller, it starts to look like there’s something wrong with the home. Chances are, they’ve seriously misread the market and now have to consider a price cut if they want to sell.
In the real estate game, you’ll often hear the phrase “Days on the Market” (DOM). For home buyers, this is a crucially important term to understand. Why? Because it tells you how long a home listing has been on the market. The higher that number gets the more its listing price is affected. Smart buyers will want to keep an eye on this number as it could signal an opportunity for a great deal. You just need to know how to approach it and negotiate in the right way.
What Does“Days on the Market” Mean?
When looking at a listing, a savvy buyer will want to note what the DOM on a listing is. A long DOM indicates that the property might be overpriced or have some issues that are putting off a lot of buyers. Generally, the longer a listing remains on the market the staler it starts to look. The sellers have to compete with fresh listings that will attract more interested buyers. Their only chance of selling now is to make a PAINFUL PRICE CUT or hope that a new buyer will enter the market that likes what is turning away the others. Most listing agents will advise a price cut. Besides, any buyer that shows up now will notice the long DOM, correctly assume that the seller is desperate, and hammer them down to a lower price.
How Buyers Can Take Advantage of DOM
A high DOM can indicate that there’s something wrong with the house, but it could also just be overpriced. A recent report from the National Association of Realtors showed an average DOM of 26 days in May 2019. The report also stated that 53% of homes stayed on the market for less than a month. It should be remembered though that these are national figures and might not represent the situation in your locality. State and county DOMs can vary widely. To know what your locality is, you’ll want to talk with Realtor Bernie Bogner. He can tell you what the local average is and even point out homes that are currently well above that.
When viewing these properties, buyers and their agents can try and determine a seller’s urgency to sell by asking a few probing questions. Ask their listing agent about why it’s been so long on the market. Try to feel out how open they are to a lower offer by seeing how a listing agent responds to any of your questions and offers. While an agent can’t violate their fiduciary responsibility to the seller, you can still glean some important information by watching their body language. If they make counter-offers or call you back later than it does suggest that they’re open to negotiations. You can then make what you and your agent believe is a reasonable offer based on comparable sales. If the sellers refuse to budge past a certain price, then look into getting some concessions. For example, having the seller pay a portion of your closing costs.
Days on the Market Loopholes
Be aware that some provinces have a few loopholes that allow a seller to reset their DOM. For instance, in New York, if a listing is taken down for 90 consecutive days then it resets to zero on being relisted. This usually happens as well when a new agent takes over. Make sure to do some deep research with your agent into the property’s entire listing history. The entire listing history of any listing can be tracked back over 30 years.