Days on the market is a specific term used in the real estate industry to quantify how long a house, or a group of homes in an area, has been listed until it reaches pending status, which is the first step towards closing a home. This is a figure that will show up time and time again as a buyer progresses their search or a homeowner begins a sale. This article will talk about how days on market is exactly measured and why it is so important for many people.
How DOM Is Calculated?
The days on market, or DOM for short, actually refers to two different numbers. If you hear someone talk about the overall DOM, they are talking about the average of a specific group of homes. It can also be talking about a specific home which you can get from the listing to its pending date.
If you want to figure out the DOM for a certain neighborhood you will want to take the specific DOM of every home on the market and average them out. If you have a home that got an agreement after 30 days being on the market then the DOM for that how will be 30 days. If you then have 10 houses that have DOM’s of 45 days, and then another 20 houses have been on the market for 60 days, you will use these numbers to figure out the DOM of the entire neighborhood. This will give you the average DOM of 54 days on average. This means the house that sold in 30 days sold 24 days faster then the average house in that area, which would make it a fast home sale for the neighborhood.
What A DOM Means For A Buyer
When a buyer searches for a home, they will look at the days on market of each home. This number matters to them because often a buyer develops a certain concept of the home by its listing length. For example, a buyer who sees a home that has been listed far longer than other comparable homes may think that there is a quality within the home that makes it undesirable. Or on the other hand, the home may be worth some negotiation because a buyer may reason that the seller is more anxious to sell as the days increase, and the buyer may be able to get a better price.
What A DOM Means To A Seller
When a home seller puts his home on the market, chances are they are more interested in the average days on market number. The average days on market will give an idea to the sellers on how long he can expect the home to sit on the market before it is purchased. If the home sits on the market for longer than the average DOM, then this may alert the seller that he needs to change his marketing tactics because he is not getting the traffic or buyers that are expected. If the sellers graph different average DOMS from the past 6 months, this can tell him the current market trend.
What Can Cause A Long DOM Of A Home?
There can be many reasons that a home sits on the market longer then similar homes in the area. If a home has little, or no, marketing it will sit on the market longer. Maybe a seller has been remodeling a home while they are listing it making it harder to get people in for showings. Any issues that make it harder to show the house will also make it harder to find a good buyer because it will lower the amount of traffic that comes into the home. If you have a lock box for your home it will usually get more exposure because it makes it easier to show the house to anyone that wants to look at it. One very common reason is that the seller has priced their home too high and they are just going to wait until they find someone that will buy it for the price that they are asking for it.