Days on market is an important consideration when looking at the real estate market. It is important to understand the definition of days on market in real estate. Days on market or DOM is one of the terms or abbreviations that you may encounter during the home buying process.
The definition of the average days on market or DOM is the actual number of days that a home has been listed in the MLS until which time it changes status from active to active under contract. If a property is listed as coming soon in the MLS, those days do NOT count towards the days on market.
Once a property changes status from active to active under contract, the days will continue to accumulate. If a property has too many days on market, it may influence a buyer to think that something is wrong with the house, or it is priced too high.
The total number of days on market can impact the listing, and it is important to understand.Days on Market | 4 Important Tips to Understand ThemClick To Tweet
Listing Statuses and Their Definitions
- Coming soon: A valid listing contract exists on the property, and no offer has been accepted on the property. With coming soon the marketing consists of putting it into the MLS with photos However, there are no showings with coming soon status. DOM will not accumulate.
- Active listing: A valid listing contract exists on the property without an offer in place. DOM will accumulate.
- Active under contract: Offer has been accepted by the seller. The seller can either can continue to market the property and look for backup offers or the sale is subject to a third party approval or court approval. With this status, the DOM will not accumulate.
- Pending status: The seller has accepted an offer on their listed property and is not soliciting any other offers from the MLS. DOM will not accumulate with pending status. No DOM accumulate.
- Canceled: The listing agreement on the property has been canceled. It is now off the market.
- Expired: The time frame for the listing agreement has expired. The time frame for the listing contract has run out. An expired listing may mean that the property was overpriced.
- Sold: The escrow has closed, and the title has conveyed to the buyer.
- Hold: A listing agreement is in place, and and no offer has been accepted. The Listing Broker is in possession of instructions from the seller to submit the listing to the hold status. No DOM accumulate.
- Leased: The property has been leased.
- Withdrawn: A listing agreement remains in effect. The property is no longer being marketed per the MLS rules. DOM does not accumulate.
What is CDOM?
CDOM or Cumulative Days on Market and is the total amount of the DOM (Days on Market) from the existing listing and any previous listings for a property. The cumulative days on market will provide the total time and number of days the home has been on the market even if it was relisted. The CDOM for any new listing will include the DOM from any previous listings for that property.
The CDOM will reset to zero if the previous listing has been Cancelled or Expired for more than 90 days, or if the listing was sold or leased.
If a buyer will see both the DOM/CDOM, if the CDOM is longer than the DOM, then the property has been marketed before. It is a good idea to check the property/listing history to see how many times the seller has attempted to sell the property.
Your real estate agent can research the listing history on the property.
Pricing a Home Correctly from the Start
Even in this very competitive real estate market we are currently seeing, it is still important to properly price a home correctly. A common mistake that sellers make is to be unrealiistic with their expectation and set the price higher than market value.
Overpricing a home can have detrimental effects on selling a home. It is common for the sellers to set an unrealistic price thinking their home is worth more than the actual value. Setting a price too high will likely put off potential buyers.Days on Market | 4 Important Tips to Understand ThemClick To Tweet
Why a Home May Accumulate More DOM Than Others?
There are reasons why a home has not sold including the presence of deferred maintenance on the home. Deferred maintenance is a turn off for potential buyers, as they may think the entire home has not been maintained.
Curb Appeal is Lacking
Other factors include if the home is lacking in curb appeal. Buyers want to see the home in it’s best light and the home only has one chance to make a good first impression, both online and in person. In today’s time, the photos should provide an excellent representation of the home, or a buyer may just pass the listing right on by.
Seller May Not be Flexible with Selling Process
It is important for a seller to understand the home selling process right from the beginning. If a seller is difficult and does not want showings, then those issues may make a listing difficult to sell.
Tenant Occupied Property
Selling a tenant occupied property can be more challenging to sell. The tenant may not want to experience the inconveniences of selling a home. They may not allow showings in the property or cooperate with a home inspection or any other inspections that a buyer may request. It is a good idea for seller to work with the tenants an it may be required to incentivize the tenants to gain their cooperation.
Days on markets numbers are important information for buyers to consider the listings. Keep in mind that while the market is so competitive and buyers are taking advantage of low interest rates and want to get into the market., A property that has a high DOM home doesn’t mean it’s not worth looking at, and in fact, the seller may be more open to negotations.
About the Author
The article “4 Important Tips to Understand Days on Market in Real Estate” was written by Sharon Paxson, one of the best Newport Beach Real Estate agents. With experience since 2005, representing buyers, sellers, and landlords, we welcome the opportunity to share our expertise with you and guide you through your real estate transaction.