To those of us who are involved with Charlottesville real estate, the abbreviation DOM means “Days On the Market”. That is the term in our area although other states may use different acronyms. It means the number of days that the property has been actively listed on the MLS multiple listing service. So in other words, if you put your house for sale on the market on Sept. 1st… on Sept. 5th your listing would have 5 DOM.
But why exactly does DOM matter to a seller or a buyer?
DOM For A Seller: In some ways, a seller has a bit of control over the number of days that his/her home is on the market before it sells. The extreme would be a home priced at $10 … a price tag likely to sell quickly. That probably doesn’t happen in real life. But it gives you an idea of the importance of pricing your home correctly for the time frame that you need. Many factors play into this, including the seasonality of when the listing is presented to the market. For example, in Virginia homes with pools may be more enticing in May than they would be in October. Each seller has his own needs and plans that influence this too. If a seller has been transferred to another state or has a death in the family or is involved in a divorce, those all could add to the sense of urgency to sell the home quickly. In those cases it will be very important to carefully examine the market information provided by your realtor, so that you can see how fast similar properties are selling in your area, you will know what to expect, and you will see your competition’s comparable pricing.
There’s another type of seller as well. Sometimes people want to put their home on the market just to test if they could get X price for it. They don’t need to sell it fast. In fact, if they receive an acceptable offer quickly, they need to make hurried arrangements for their next location because they don’t actually have their next home in mind yet. But they are prepared to hunker down with the For Sale sign, maybe to hold out for the price they believe they deserve or need.
That strategy involves several dynamics, one of which is known as “following the market down”. Most of the online buyer interest in a newly listed property comes in the first 60 days because there is already a built-up backlog of buyers who’ve been searching for particular criteria. Each buyer’s urgency may vary but all of them will be comparing the seller’s pricing to similar options. If the “test price” a seller chooses is above the market range, the home will remain on the market as other comparables are sold instead. So the seller reduces the price. And buyers see the reduction but perhaps (in recent years) all similar homes have lost value. So the seller reduces the price again. And so on. Buyers judge this property to be somewhat stale in the marketplace, they may wonder what’s wrong with it that it’s been on the market for so long. And the list price continues to be above the market price as values fall. “Following the market down” may create unintentionally high DOM. It is worth noting that there are unique properties that usually have more DOM because they appeal to a smaller segment of buyers.
DOM for Buyers: Buyers aren’t stupid. They have access to so much information about market details that they nearly always remark about a property that’s been on the market for a long time. Why? Why hasn’t it sold by now? What’s wrong with it? Is it the neighbors? Is it overpriced? Did it fail an inspection? If it’s been for sale for so long, does this mean we can offer a ridiculously low amount to a desperate seller?
As you see, there are many aspects of DOM that make it a very important goal of marketing your property properly. A good realtor knows how to make your own strategy successful. Your realtor can tell you what to expect for your own DOM, one topic that Pam will discuss with you when Pam Dent sells your home. Give Pam a call at 434-960-0161 and find out how she would go about achieving a successful sale of your own home in the time frame of your choice. As always, no obligation.