You may come across unfamiliar terms and abbreviations when buying or selling a home. One such abbreviation is DOM, which stands for Days on Market.
The DOM represents the number of days a home has been listed in the Multiple Listing Service (MLS), starting from the day it is first entered until it is under contract. However, the DOM can be a bit more complicated than it seems. In real estate, the DOM can increase even after a seller accepts an offer and changes the MLS status.
Understanding the impact of the total days a home is on the market is crucial. Prospective buyers often ask real estate agents about the length of time a house has been on the market. If the DOM is higher than the average, it can negatively affect the seller's chances. Therefore, it is important to comprehend all aspects of DOM in real estate.
What Does Contingent Mean?
Even when a contract is agreed upon between the buyer and seller, the DOM can continue to increase for MLS listings. This is because different listing statuses can be applied to a property after an offer is accepted.
The listing status might change to "contingent" when an offer is accepted, and time will continually be added to the DOM until the status changes to "pending" in most cases. When marked as a contingent sale, the home is still recognized as for sale in many MLS systems.
Contingencies such as property inspection and mortgage financing are common in real estate sales. By making listings pending, the DOM freezes, but it does not with a contingent listing status. Therefore, if the home comes back on the market for any reason, the days on the market will be artificially inflated.
What Does Pending Mean?
The pending listing status generally indicates that all contingencies have been met. Many agents keep their listings contingent instead of pending until every contingency is fulfilled.
However, it is worth noting that keeping listings contingent instead of pending might not be the most effective strategy. It is advisable to fully read into the difference between contingent and pending when selling a home.
How Useful is DOM in Real Estate?
DOM can provide valuable insights into the local market conditions and the position of a property within it. For instance, a low DOM indicates a new listing, making the seller less likely to accept a significantly lower price and increasing the chances of competition among buyers.
Conversely, a high DOM suggests that the asking price might be higher than what the market can bear, potentially indicating unreasonable seller expectations.
When considering a home with a higher DOM, it is important to look at its history. A home with an extended time on the market might have undergone price reductions or resolved major factors that were initially deterring buyers.
However, relying solely on the DOM can be misleading. For example, a home's status changing to "contingent" and then falling apart shortly after listing might artificially inflate the DOM, giving the false impression that the home has been on the market for a long time.
Can the Days on the Market Be Reset?
If a listing is canceled or expires, the DOM will reset to zero when another real estate agent relists the property. In some areas, the previous listing history might still be shown as cumulative days on the market (CDOM).
The DOM cannot be changed otherwise and will continue to accumulate while the seller seeks a buyer. Attempting to "relist" the property while it is still for sale after a considerable price reduction is a common strategy among real estate agents. However, savvy home buyers and experienced buyer's agents usually recognize this tactic.
To reset the CDOM in most multiple listing services, the home must be taken off the market for a certain period. For example, in Massachusetts, a home must be removed from the market for 60 days for the previous listing not to be recorded in the MLS days on the market summary.
Consult with realtors in your area to determine how many days a house needs to be off the market for the DOM to reset.
How to Reduce the Time on the Market
The longer a home stays on the market, the less likely it is to sell at the desired price. Reducing the time on the market is a crucial goal for home sellers. Here are some essential factors to consider:
Setting the Correct House Price
Avoid the mistake of overpricing your home. Setting the price too high can discourage potential buyers. Be aware of common reasons why pricing a home becomes problematic and learn when to lower the asking price.
Flexibility Throughout the Process
Be accommodating when it comes to showing your home to potential buyers. Changing plans to allow buyers access to the property and having a straightforward appointment scheduling process can make a significant difference.
Staging the Home
Make your property look its best by deep cleaning, decluttering, making minor repairs, and repainting if necessary. A well-maintained home has a better chance of selling quickly.
Getting the Marketing Right
Invest in professional photographs and ensure a detailed description in the listing. Develop a comprehensive marketing strategy that targets the right buyer for your home and location.
Negotiations
Approach negotiations with an open mind and consider all offers. Even if an offer seems initially low, it can be a starting point for further discussions.
Choosing the Best Real Estate Agent
Find an experienced agent with a track record of success. A skilled agent can find buyers quickly and help achieve the best possible price for your home.
DOM is an Important Statistic for Real Estate Agents
Days on the market greatly influence house sales. When interviewing real estate agents, consider their performance regarding DOM. Look for an agent who consistently outperforms the market's average days on the market.
Average Days on Market by Zip Code
Researching the average days on the market by zip code can help you understand the local real estate market. If a home has been on the market for longer than the average time in the area, it might be time for a price adjustment. Work with a real estate agent who can provide this information.
Closing Thoughts on DOM
DOM is a valuable statistic that helps buyers assess listings and determine appropriate offers. However, it is important not to solely rely on the DOM and consider other factors that might have contributed to a high number. Conversely, sellers should aim to prevent the DOM from increasing excessively to maximize buyer competition. Understanding how DOM works in real estate is key to navigating the market successfully.
About the Author: Bill Gassett is a nationally recognized expert in real estate. With over 37 years of experience, he specializes in mortgages, financing, moving, home improvement, and general real estate. Reach Bill via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of various Metrowest MA towns throughout his career. If you're considering selling your home, he can provide valuable marketing expertise. Bill services real estate sales in Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge, MA.