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What to Know About the “Days on Market Metric”

When you’re buying or selling a house, there are some relevant terms and metrics to be aware of, one of which is the “days on the market.” Also known as DOM, this is a critical metric because the number of days any property spends on the market will affect its price. If you’re a buyer, you can use the information to your advantage in price negotiations.

Days on the market are the number of days a property has spent on the local MLS until the point at which the seller accepts an offer and signs a contract. You might also hear it called market time or time on the market.

If there’s a house you have your eye on that’s only been on the market for a few days, the price could end up being higher or lower than asking. A home on the market for a long period of time is probably overpriced, by contrast, and it’s a red flag that the seller and their agent are misunderstanding the market.

While DOM can be a sign of a problem in pricing, it also represents the opportunity to snag a bargain. You can use the days on the market to find houses that have been listed for a long time, and then you might find a seller willing to take a much lower offer. Of course, it could also be that with a length DOM, the seller refuses to accept less than their asking price, but many sellers don’t want their home to sit idle on the MLS, becoming a stale listing.

When a house has a high DOM, people tend to avoid it, thinking there’s something wrong with it. It could be your dream home, but it was overpriced from the beginning and spent too much time on the market. Once a house gets the perception of being undesirable or overpriced, it’s hard to shake that reputation.

If you’re a buyer and you have your eye on a house with a long DOM, you can get your agent to contact the listing agent on the property and get a feel for the sense of urgency from the seller. Your agent can delve into why the property’s been on the market so long and determine how willing the seller is to accept lower offers.

There are some markets where the days a listing spends on the market can reset. For example, if you’re in New York and a listing is taken down for 90 days, the clock restarts when relisted. This also usually happens if a new agent takes the listing on.

While DOM can be a way for buyers to score a deal, what are the implications for sellers?

As a seller, you have to understand that buyers are ultimately setting the numbers in the market. If your house has been lingering on the market longer than comparable properties in the area, it’s almost inevitable you’ll have to offer concessions or drop the price.

If you think you can just relist it and that’ll solve the problem, you need to make significant changes beforehand. You will have to change something to make the property more appealing, whether that’s updates, staging, or, again, a change in pricing. You might also need to shift your marketing strategy.

Gain an understanding of the usual number of days on the market in your area too, because it can vary widely between different locations.

Whether you’re a buyer or a seller, days on the market are a metric you need to pay attention to. If you’re the seller and your listing is stagnant, you need to dive into the deeper issue. If you’re a buyer, don’t be put off by a house that’s been on the market for a long time—it could be a window of opportunity.

Written by Ashley Sutphin for Copyright © 2023 Realty Times All Rights Reserved.