From the Inbox:
A couple of days ago I received a great question from a reader that I thought I would share:
Is there still a stigma attached to the DOM considering many homes are taking much longer to sell and how many days are too many.
“DOM” = Days on Market = how many days a home has been listed for sale.
Some home buyers (and real estate agents) are convinced that a home that has been on the market “a long time” has something wrong with it. As our astute questioner points out though, homes are generally taking much longer to sell these days. Is that accounted for in these buyers and agents minds? How much is “a long time”?
Answer: I have no idea.
Personally, I’ve never put as much weight on DOM as many do. Why not? Because there are are several reasons that a home may languish on the market, or show a “high” DOM when there is nothing (structurally or cosmetically) wrong with the home.
It could be overpriced. Now that is “wrong”, but it’s wrongness in the pricing and marketing of the home — there may be nothing wrong with the home itself.
There are lots of reasons a
home can have high DOM
Maybe it was in and out of escrow, with the DOM piling up. Maybe due to something wrong with the buyers, not the home.
Maybe some knucklehead had it in the MLS in the wrong subdivision, or the wrong price, or the wrong zip code — so no buyer ever knew it was for sale. Think that doesn’t happen? Trust me, it happens all the time.
And sadly, there are those out there that will play games with the MLS to artificially “reset” the DOM. Our MLS does a relatively good job of preventing that (though there are ways. Unethical ways, but ways none-the-less). I’ve heard there are MLS’s out there where resetting the DOM is but a few clicks away.
And yes, sometimes a home stays on the market because there is something wrong with it. Usually market dynamics will take care of those homes and they will either: 1) come down in price until the price-point accounts for the defect and the market considers it a reasonable deal; 2) the defect is addressed’ or 3) the home is taken off the market. I suppose I should add 4) the home is purchased by an unsuspecting buyer that doesn’t get a home inspection (a really, really bad idea. But it happens.)
Some of these things are fairly easy to detect in a thorough listing history review. But the high DOM stigma has often already latched on regardless of the reason or if that reason truly reflects on the home itself.
So *I* don’t think DOM is worth a hill of beans. But I’m not a home buyer. The fact is, many home buyers seem to care. And some care a lot. I’ve had buyers who wanted to know the DOM before they wanted to know the price. There is a common perception that sellers whose homes have been on the market “a long time” will be more willing to negotiate, giving the buyer a better deal.
But consider this… Maybe, just maybe, the DOM is high because the sellers are not willing to negotiate.
To answer the specific questions, is there still a stigma attached to DOM? Yes, in many people’s eyes. Right or wrong, DOM will always be a concern to some. How many days are too many? Beats me. I suspect it’s entirely dependent on the buyer and/or the influence of the buyer’s agent.
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...