What is DOM in Real Estate?
You might encounter new terms and abbreviations you don’t understand during the home buying or selling process. One such abbreviation might be DOM, which means Days on Market.
The DOM is the number of days the home has been listed in the MLS. It starts when it is first entered into the multiple listing service until the home is under contract.
While this might seem simple, it’s not always that straightforward. The DOM can increase in real estate even after the seller accepts an offer and changes the Multiple Listing Service status.
The total number of days a home is on the market can have a powerful impact on its sale, so it is vital to understand this.
One of the first things prospective buyers will ask real estate agents is how long the house has been on the market. A higher DOM than the average days on the market can hurt a home seller.
Consumers can often see essential information besides the property address on a real estate website, including the list date, price, MLS number, and any price reductions.
A real estate agent’s performance is often graded by their average days on the market. Let’s take an in-depth look at everything to know about DOM in real estate.
What Does Contingent Mean?
Even when a contract has been agreed upon between buyer and seller, the DOM can continue to increase for MLS listings. This is because multiple different listing statuses can be applied to a property when an offer has been accepted.
The listing status might change to “contingent” when an offer has been accepted. Time will continually be added to the DOM until the status changes to “pending” in most cases. Most MLS systems are set up to recognize a home as still for sale when marked as a contingent sale.
When a contract is accepted, the listing agent can change the market status from for sale to either contingent or pending. Many real estate agents will change the listing status to contingent when the remaining conditions are to be fulfilled.
Common real estate contingencies exist in many sales, such as property inspection and mortgage financing. I like to make my real estate listings pending. By making my listings pending, the DOM freezes.
With the contingent listing status, it does not. So, if the home comes back on the market for some reason, the days on the market will be artificially inflated.
What Does Pending Mean?
The pending listing status generally means that all contingencies have been met. Many agents will keep their listings contingent instead of pending until every contingency is met.
Frankly, I think this is a mistake, and I discuss it at length in the section on the difference between contingent and pending. If you’re going to be selling a home, it’s worth reading.
How Useful is DOM in Real Estate?
When buying a home, DOM can help you assess the local market conditions and the property’s position within it.
For example, if the home doesn’t have many days on the market, it shows it’s a new listing. This will mean that the seller is less likely to accept a significantly lower price, and it could also mean a greater chance of competition from other buyers.
However, if the home’s DOM is higher than the average, there is a greater chance of getting a better deal.
A longer DOM could also indicate that the asking price is higher than the market will bear. The seller could have unreasonable expectations.
Consider The Property History, Including Price Reductions and Listing Status
However, when looking at a home with more days on the market, you need to consider its history. It might be the case that the home has been reduced in price, and this major factor that was putting off buyers has now been removed.
This number can also give you the wrong impression in other ways. If the home’s status changes to “contingent” just a few days after being listed, but the sale falls apart, the DOM number might be misleading.
It might give the impression that the home has been on the market for many more weeks than the few days it was actually available. It’s possible the house wasn’t on the market for a long time.
Can The Days on the Market Be Reset?
If the listing is canceled or expires, the DOM will return to zero when another real estate agent relists it. DOM standards will show the previous listing history in some areas of the country. It’s what’s referred to as CDOM or cumulative days on the market.
The DOM cannot be changed otherwise and will continue adding up while the seller looks for a buyer. A common strategy among some real estate agents is to “relist the property” while it is still for sale.
Sometimes, this is done after a considerable price reduction so the home appears in the listing updates as a new property for sale. Savvy home buyers and any seasoned buyer’s agent will pick up on this, so it’s usually ineffective.
What is CDOM?
CDOM is the Cumulative Days on the Market and will tell you the total time the home has been for sale, even if it was relisted.
It doesn’t matter if a different real estate agent is used to list the home once again; it will still reveal to buyers the total amount of time it’s been marketed for.
The only way to reset this in most multiple listing services is to take the home off the market for a certain amount of time. For example, a seller in Massachusetts must have their home removed from the real estate market for 60 days.
After 60 days, the previous listing will not be recorded in the MLS days on the market summary. Old listings can appear new again. Getting the DOM counter back to zero days can be very beneficial.
A good Realtor will make sure to be past the sixty-day mark before relisting the property.
Doing so can have a significant effect when creating a marketing plan. An experienced agent knows how much a previous DOM can influence a house sale.
Check with realtors in your area on how many days the house needs to be off the market before DOM resets.
How to Reduce The Time on The Market
The longer your home is in the MLS, the less likely you’ll get the price you want. The length of time for the sale is one of many red flags in real estate that home sellers must overcome. Reducing the time on the market should be a goal in any home sale.
There will be something, or perhaps several things, discouraging buyers from making an offer. If you can determine these things, you can keep the DOM number low.
Below are some of the most vital things for a timely house sale.
Setting The Correct House Price
A common mistake is to set the price of your home higher than it should be. It is natural for sellers to believe their home is worth more than it is, but this is one guaranteed way to put off potential buyers.
There are many common reasons why pricing a home for sale becomes a problem for homeowners.
If you’ve made a pricing mistake, understanding when to lower the asking price is critical.
Flexibility Throughout The Process
Selling your home involves showing it to potential buyers, which isn’t always easy or convenient. However, buyers who can’t view the home will not make an offer.
As a seller, you must be ready to change your plans to allow buyers access to the property. Also, to make showing your home more accessible, you need a straightforward way to schedule appointments.
You need a method for quickly approving showings so that potential buyers can see your home without much delay. Restrictions like having 24-hour showing notice can make your property harder to sell.
Also, forcing the listing agent to accompany the buyer’s agent is a significant mistake. It does nothing to facilitate the home selling process and could hinder a quick sale.
Staging The Home
Your property must look its best if you expect it to sell quickly. This might mean deep cleaning, decluttering, minor repairs, and repainting. Homes that look uncared for and need maintenance will stay on the market for extended periods.
Take the time to get your home ready by donating to charity the valuable items. Charity donations for furniture and clothing you won’t be bringing with you are great things to do. Not only will it make your house look much better, but you’ll also be helping someone who needs it.
Once that is done, you can hire one of the best junk removal companies to remove unwanted items with minimal value.
Even in hot real estate markets that heavily favor home sellers, spending time preparing your home for sale still makes sense.
Getting The Marketing Right
When you have staged your home, the next step is to get professional photographs to give the right first impression when the buyer finds your property in the MLS listings. This will determine whether they decide to inquire further and request a showing.
Other things, like having a detailed description in the listing, are essential. The overall marketing strategy needs to be nailed for the right buyer for the home and location. The marketing could include classified advertising, social media posts, or even color brochures.
Negotiations
Negotiations aren’t easy when you have a lot of emotions tied up in the home.
Even if the buyer’s offer is what you consider lowball, they are interested in the home, and it’s a starting point. Many lowball house offers end up coming together.
Choosing The Best Real Estate Agent
To avoid your home sitting on the market for longer than it needs to, you need to find an experienced real estate agent. They will have a better chance at finding a buyer quickly and selling at the best possible price.
While it might be tempting to use a real estate agent you know or choose the first agent you find, it is better to be more selective. Don’t be afraid to discuss selling your home with multiple agents, and then choose the best candidate for the job.
Look for a track record of success. There is nothing better than that. You should expect a seller’s real estate agent to do these things.
DOM is an Important Statistic For Real Estate Agents
It’s probably not a stretch to say you want a Realtor who sells homes quickly and for top dollar. Days on the market is certainly a statistic worth researching when interviewing real estate agents. Having someone who outperforms the market is what you should look for.
Days on the market influence house sales tremendously!
Accurate listing prices based on the current market will get you the most money. Market statistics rarely lie when it comes to performance.
It would be wise to look for a real estate agent who consistently beats the area’s average days on the market.
Average Days on Market By Zip Code
One of the better ways to research the local real estate market is to understand the average days on the market by Zip Code. Knowing the baseline for the local days on the market average can determine whether a house is priced correctly.
When a home has been on the market for more than the average number of days for the city or town, it could be time for a price adjustment.
Work with a real estate agent who can research days on the market by zip.
Closing Thoughts on DOM
DOM numbers are helpful information to help buyers sort through the listings and offer the right amount for a home. But it shouldn’t be looked at in isolation as a few factors could have caused a high number. A high DOM home doesn’t mean it’s not a property worth pursuing.
On the other hand, sellers should try to stop the DOM from increasing too much if they expect to get the price they want. A stale listing will stifle buyer competition. Hopefully, you now have a much better understanding of how DOM works in real estate.
About the Author: Bill Gassett, a nationally recognized leader in his field, provided the above information on DOM in Real Estate. Bill has expertise in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications he has been featured in. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 37+ years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: 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.
