Days on Market, also known as DOM, is a widespread commercial term, which applies to all markets and products, be it a cake, a pair of shoes, or a real estate item. This concept has everything to do with the idea of “freshness” or actuality that any type of product has on a specific market.
After a particular moment in time, any of these products becomes stale. Nobody wants to keep a stale product, so the sale should happen before that moment.
The same applies to the houses that are listed for sale. When people ask real estate agents what are days on the market, it refers to exactly how long a home has been for sale.
Each day that your property does not sell will add up to the value of your DOM. Days on the market are your enemy as a home seller!
DOM has a clear definition given by the National Association of Realtors. DOM starts when the house is listed for sale on the MLS (brokers’ multiple listing services). Each day adds up, one by one, and the counting ends when the seller and the buyer have signed the purchase contract.
DOM lets everybody know which property is fresh and which is not. DOM does not present to buyers or sellers the reason why a certain house won’t sell. However, it announces to all interested persons that it is either fresh or stale.
The real estate market also uses the concept of average DOM, which is calculated from the DOM values of all properties sold during a specific time interval.
IF the average DOM value is low, it shows that the properties sell fast, and the sellers are at an advantage. If the average DOM value is high, the market is weak. This time, buyers are at an advantage.
The average DOM value is also influenced by the season. Data shows that spring favors a low DOM, and the houses tend to be purchased faster. Whereas during winter, homes sell slower, thus a higher DOM. Higher days on the market happen, especially in areas with bad weather and low temperatures.
During the last years, the property market in the USA favored sellers. For example, 2017 was the best year, with a national average DOM, getting down to 29 days. It is the lowest average DOM since 2011. Days on the market have been even shorter over the last couple of years.
In such a situation, where the average value is low, a house with a high DOM signals trouble for all potential buyers. Something must be wrong with it.
There is another element to keep in mind. DOM might vary depending on the neighborhood where the house is. Our recommendation is to do more detailed research in each specific area.
As we mentioned before, DOM helps everybody in the real estate market. Yet, the sellers are the ones to depend on it the most. The market is most interested in fresh properties.
The interest in one house is at a peak during the first weeks. Afterward, the level of interest, the number of visitors, and potential buyers drop drastically.
The few buyers that still show interest are usually new ones on the market. If your house’s DOM is below average DOM, buyers will start wondering what is wrong with that house.
Here are the common reasons for a higher DOM: location, state, condition. You can’t change the neighborhood, yet you can refurbish the house and ask for a smaller price.
When DOM value is high, potential buyers think that the seller is unavailable or stubborn.
It is vital to note that some real estate agents will market their homes in the multiple listing service as an active-under contract home. Doing so can be a mistake because it needlessly allows the days on the market to increase artificially.
If the sale is solid, the home's listing status should be changed to pending, not contingent.
Here are some measures that you can take to reduce DOM number:
Pricing correctly: Determine the price you desire from the first moment your house is listed on the market. You need to determine the appropriate amount for your property, depending on many factors applicable in the present moment. If the price you request is too pretentious, you might never be able to sell it.
Negotiate the price: If things don’t move towards selling your property and all the offers you receive are far from what you want, it might be time to recalculate the price you request.
Repairs and renovation: You can always make your house more attractive for buyers. Be it a bigger or a smaller budget, some repairing and renovation works will attract more interest towards your property. The idea is to get the house into good condition and let everybody see that it is modern, comfortable, fresh, and welcoming.
Staging: Before opening the house to visits from potential buyers, it must be thoroughly cleaned. Then all details need to be arranged in an eye-catching manner.
Some companies specialize in the staging of your home. They professionally rearrange furniture and décor or even bring in new, more presentable ones. Potential buyers must imagine that their life will be great in this house.
Making the right improvements: before you even contemplate putting your home up for sale, it is crucial to spend your money in the right places. Some home improvements will make a difference in selling, while others will not.
If the days go by and your house does not sell, not even corrective measures can make it interesting. There is a point beyond which the property simply becomes stale.
Thus a common practice is to give the property a chance to sell by taking it off the market. Then, after several weeks or months, you will re-list it.
After re-listing the house, DOM starts from zero. Although not very ethical, this can be a healthy strategy that leads to a good result and a fast sale. However, the second listing time, you need to adjust some elements, like reducing the price or refurbishing the house.
If you let things just as they are, you risk going all over again through the same process and accumulating a high DOM once again.
There is another option. You could just wait a more extended period so that the market gets to higher prices which satisfy your request. There are no guarantees, however.
The prices will not necessarily go your way, and nobody can tell you for sure how much you need to wait. During this waiting time, you can rent the house, so in the end, your patience can prove to be helpful.
You may have to bite the bullet and price your home according to what the market says it should be.
Keeping your days on the market low is essential as a home seller. When days on the market increase, there is almost always a direct correlation to the list price to sale price ratio.