How does "Days on Market" Impact My Offer?

A real estate listing provides a lot of critical data. In addition to the all-important price, there’s the number of bedrooms, year the home was built, square footage, size of the lot, etc. But one less-discussed number that should always be considered is the home’s days on market (DOM).

When buyers see a property with a high DOM, they typically jump to a few conclusions — that there’s something wrong with the home, that it’s priced too high, or that the seller is probably desperate and will accept a low offer. While one or all of these may be true, there are sometimes more benign reasons.

Let’s take a closer look at DOM and how it should be considered when putting together an offer.

 

What is the typical DOM?

If you’re a follower of real estate you may hear the term “average days on market.” This number comes from adding the DOM of each listing in a particular area and dividing that by the number of listings. In a buyer’s market, the average DOM is typically higher, while in a seller’s market it will likely be lower.

According to the National Association of REALTORS^®, the average DOM in the U.S. for September 2019 was 32 days, up from 31 days in August, and even with September 2018. The organization also reported that 49 percent of homes sold in September 2019 were on the market for less than a month.

 

What are the reasons for a higher DOM?

REALTOR^® David Hall with Coldwell Banker Hubbell BriarWood-Delta says in addition to the typical buyer assumptions, there are several other factors that can influence DOM.

“Market conditions, poor marketing by the seller or agent, time of year, lack of listing photos, restrictive showing times...there are a lot of potential reasons,” he said. “It could also be that there was an accepted offer that fell through due to no fault of the seller.”

 

How does DOM impact my offer?

Does a high DOM mean you have more negotiating power? Sometimes. Does it mean you can offer a lower price? Possibly. Remember, sellers aren’t always desperate, regardless of how long the home has been on the market.

“A high DOM should at the very least trigger communication between the two REALTORS^®,” said Hall. “By asking the right questions, your agent should be able to find out the ‘why’ behind the high DOM, which can help determine whether or not you want to make an offer, and for how much.”

DOM can be a useful indicator of the quality and desirability of a home. Just remember that it should not be considered in isolation. To ensure you’re looking at all the factors, it’s important to enlist the help of a local REALTOR^®.

“Having an agent in your corner who knows the right questions to ask can sometimes create an opportunity that others have overlooked,” said Hall. “A high DOM means due diligence is needed, but it doesn’t mean you should immediately rule a property out. You’re REALTOR can do the research and help guide you in making a sound financial decision^®.”

 

To partner with a professional who is looking out for your best interests, visit the Greater Lansing Association of REALTORS^® website at www.lansing-realestate.com for a list of reputable agents.