When viewing home listings, have you ever thought, "How many days has this home been on the market?" Sure, almost everyone does.
Why do people wonder and always inquire about this number?
Well, it probably has to do with the thought that if a property has been on the market for, say 90 days, then there must be something wrong with the home/property, the home is priced too high, there mustn't be enough commission being offered to buyer's agents (and therefore the buyer would most likely have to top up any shortfall), or the seller must be getting desperate to sell and therefore will be more willing to take a "much lower offer." All great reasons.
All of these are the same reasons why some agents play a little sales gimmick with that DOM number (under the direction of the seller, of course).
Here is what agents know: If a property listing expires or is terminated early, then the DOM (Days On Market) indicator is reset back to ZERO. So, if they relist the property for sale the same day, or the next day, the number shows up as ZERO.
This is the "DOM market" you see on all publicly accessible real estate websites (often you'll be required to "log in" to a website to see that number). This is the number you'll see on agent IDX (internet data exchange) websites (like this one that has a direct feed from the local MLS®), or a website that is fed through a DDF agreement with Realtor dot ca. FYI – Realtor dot ca is a data accumulator of all 110+ MLS Systems in Canada. [The Data Distribution Facility (DDF) is a Canadian Real Estate Association (CREA) service available to REALTORS across the country. DDF exists to make real estate agents' lives easier, by giving agents access to a national pool of listings and by automating much of the listing sharing process. A DDF is most often used when a real estate office, real estate firm, online media outlet, wants to display the property listings from more than one MLS System simultaneously.]
So, if that number is so easily manipulated by sellers (and their agents), what should you do?
The first thing is to realize that that isn't the only number that is available (at least for licensed real estate agents). The main number they look at is the CDOM (cummulative days on the market). This is the number of days a seller has had a property on the MLS System market in total. It doesn't matter if the listing expired and was relisted for sale by the same agent or by an agent of another real estate agency – the number keeps increasing. There is a small caveat though – if the property has been off the market for OVER 30 consecutive days, both the DOM and the CDOM are reset to zero. So, the number you should be looking at is the CDOM and never the DOM. This number is available from any licensed real estate agent that has access to their local MLS System.
A better number to get from your agent is the "number of days since the last price adjustment." It's a number they can calculate but the dates are clearly indicated in the listing data for agents. So, why is this number the very best number to look at? Well, consider these three scenarios:
a) a home that is priced at $300,000 has a CDOM of 92 days (and has never adjusted their price in that time),
b) a home that is priced at $300,000 has a CDOM of 92 days (and has had a $15,000 downward price adjustment 19 days ago, and another $15,000 downward price adjustment 5 days ago), and
c) a home that is priced at $300,000 has a CDOM of just 5 days.
Which seller is more motivated to sell? Which property will you probably get a "better deal" on? Can you really say any of these homes are "over-priced" without getting more information?
So, DOM is a number that is readily available but it provides very little information. Your real estate agent will be able to not only show you the numbers you need to see, but can also tell you what the property is probably worth (i.e. market value, versus what a seller is asking for a property).
If you have a Buyers' Representation Agreement (in writing) with a licensed real estate agent, then they are actually required to share this information with you (along with any inducements in additional commission the seller is offering of YOUR MONEY through the purchase price). No signed Buyers' Representation Agreement with your agent? Then, they are actually prohibited from sharing that confidential information with you.
DOM is an incredibly unreliable number. Agents rarely even look at it.