Why is “Days on Market” so important to buyers? – This particular piece of data is often one the most overlooked and misstated statistic when it comes to analyzing comparable properties in most Multiple Listing Systems.
The main reason for this is primarily due to the way listings are displayed on MLS. The Days On Market (DOM) number only accounts for the days that particular home has been on the market under that specific listing agreement. Often times a seller (on the advice of an agent) will withdraw an existing listing and re-list under a new listing agreement in order to “re-set” the DOM back to zero in the hopes of having buyers think their home is new to the market. Most buyers who are familiar with a given area will not be fooled by this tactic, however some buyers from out of town may not be aware of the “total” DOM.
There have been some recent improvements by some MLS’s to allow agents to quickly obtain an archive of any particular property which is supposed to contain a record of every time a property was listed and for how long and and at what price.
The only issue with this is that in order to get a complete and accurate picture of the “Total” DOM on a given home, you will need to add up the individual DOM totals from all of the prior listings. There is no automated way to get at this number other than to calculate it manually. Most agents will not bother to do this and hence, when this particular data field is used on a Comparative Market Analysis or any other report designed to assist a buyer in determining the true market value of a home, it can be vastly understated.
So the next time you hear an agent reference the Days On Market of a home, be sure to ask what the TOTAL DOM is so that you can get the entire history of that property in order to make more informed decisions.