Does DOM matter? Or is it just a dog and pony show?

By
Real Estate Broker/Owner with Bryant Tutas-Tutas Towne Realty, Inc BK607690

Broker Bryant on his ponyOn Sunday, I did something I don't normally do, I worked!! I had canceled a listing appointment on Saturday and figured since I would already be dressed up and lookin' real purdy from Church I'd swing by and meet with my future Sellers. I go walking in, as I usually do, full of confidence and ready to take a listing, when the Seller hit me with this, "What's your average days on market(DOM)?"

Well now, I thought, that's a pretty good question. So being the professional, experienced, big time heavy hitter, top producer that I am, I answered him, "Heck...I don't know."

I was thrown off track for a minute and then I had a flash, "What a great topic for a blog post!" So here I am writing a post about DOM (days on market).

Now you're probably wondering how I, Broker Bryant, listing machine, couldn't answer such a simple question. Well....let me tell you, I honestly don't know. Today, I decided to figure it out. Now I can tell you that prior to February of this year, my DOM was 38 AND I sold every listing I placed on the market. Then, as we all know, my market in Poinciana hit the wall. Everything changed.

So.....today was MLS research day. The first thing I found out was that when you are looking for DOM, in our MLS system, it only gives you the DOM for the last REALTOR® that had the listing. It does have a field for CDOM (cumulative days on market) BUT it doesn't average them out for you. That means when you see a report in our local paper telling you DOM is 98 or whatever.....it is NOT accurate.

Here's what my research came up with for my market Poinciana (all of zip codes 34758 and 34759). For the 39 closings that we had in October, the average DOM was 126 BUT the average CDOM was 195. Quite the difference wouldn't you say?

My last 10 sales average DOM was 95 BUT the average CDOM was 192! The big difference is because I take a lot of expired listings. So I guess, in all honesty, I could have answered my Seller's question by saying my average DOM is 95.

But let's slow this dog and pony show down a little bit. What about all of my listings that haven't sold? I have 18 listings on the market right now with an average DOM of 102 and an average CDOM of 180. And to complicate things further, 9 of these I have had for less than 45 days and 2, I have had for more than 300 days!

What about the 11 listings I have withdrawn over the last 45 days and placed with management companies? How do I factor these in? So the question is, "Is my average DOM really 95?" Should I tell a Seller that when the reality is his house may not sell at all? Or would telling him 95 be a dog and pony show?

In fact, only about 2% of the inventory in Poinciana is selling every month. Based on that statistic, the truth is, that for the 2% of the inventory, that IS selling, the average CDOM for Poinciana is 195 days. For the other 98% of the active listings the CDOM is unknown.

OK, I have now managed to further confuse myself. So here are my conclusions:

  • Average DOM doesn't mean squat.
  • Average CDOM means a little more BUT only if your property is in the 2% that will sell in any given month.
  • My average DOM is 95....assuming I can sell your property.
  • I liked my first answer best, "Heck...I don't know."

So folks, that's my analysis and I'm sticking to it. Are you as confused as I am? What's your average DOM? And please...leave the dog and pony out of it.

***Image compliments of Lenn Harley. Thanks Lenn!!!

Copyright © 2007 Broker Bryant Real Estate Ramblings | All Rights Reserved

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Rainer
92,890
Andrew Trevino
Wilkes-Barre Homes For Sale
ADT Real Estate

Bryant,

I have to laugh when I think of this too. I have been asked that question by almost all of my listings during the interviewing phase. My 2nd listing ever asked me that question. I had to tell her that she was only my 2nd listing opportunity (I was sure that'd end the conversation and the listing appointment) but she allowed me to list her property that she had unsuccessfully tried to sell for almost 2 years with other brokers. I sold it a week after our 3 month listing contract expired. So, was my DOM 95 days, or was it 825?

I don't even try to go there with listing appointments any more. What's the point? I have sold every house I've listed and I haven't asked for an extension yet. Some take longer than others, but I'll get it done. That's what I tell them when they ask for my DOM. And, I'm not even close to being the big bad top producer that you are. Some day...

November 07, 2007 09:10 AM
Rainer
47,177
Lori Gilmore
Realtor - Will County Illinois
Realty Executives Success - Short Sale Professional

Broker Bryant -- I was asked this same question by a potential seller last week.  As the market has slowed more and more clients on both sides are concerned with market time. . .but as this discussion has indicated, there are a multitude of factors involved in how quickly a home sells.  Some are within our control and others well outside the scope of our control.  The best I can do is educate my sellers about all factors and make sure that we fully prepare the home for sale, price it competitively and I market it agressively. 

DOM is just a stat that can be manipulated and is often misunderstood by clients and misused by agents.

November 07, 2007 09:18 AM
Rainer
6,269
Gregory Mullen
RE/MAX Services

My answer for a prospect who asks "what is your average days on market?"

"The average days on market for customers who follow all of my professional advice is 39 days. But the average days on market for customers who do not take my professional advice is 292 days. Unfortunately some customers can't help experimenting with selling their house before eventually taking my advice."

 

November 07, 2007 09:23 AM
Rainmaker
1,084,794
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc

Michael, Blogging is all about reading and getting inspired by what others write. I do it all the time. When you do it just link back to the blog that inspired your post. Go for it. Yours is very good comment and should be made into a post.

TO ALL: This has really been a very informative comment thread. Thank you so much for adding on with all of your great comments and thoughts. I'll be sending this comment thread out to all of my current sellers. They'll learn a lot from it.

Great job everyone!!!!!

November 07, 2007 01:52 PM
Rainer
75,661
Steve Heydel
30% Referral Paid to AR Members
United Country Walker Real Estate & Auction

This can be a very misleading figure, one that the prospective client has been told to ask their REALTOR to find the "best" REALTOR to hire.

Here in the middle Tennessee area we have a LOT of new developments. It is very common to see almost daily these new homes be listed on the hotsheet as Active, Pending and Closed all on the same hotsheet!! That means that listing has a DOM of ZERO! So, if you take that house and one that is on the market for 360 days, you have an "average DOM" of 180. Try explaining to your client trying to sell that "360 day" home why their home has been on the market twice the average DOM!

Of course, its the REALTORs fault for not trying enough to sell it........

November 07, 2007 02:06 PM
Anonymous #86
Anonymous
Anonymous
It really is irrelevant, taking into account, the motivation of the seller. Anyone can sell a Million Dollar property for 200K in a matter of minutes!
November 07, 2007 03:01 PM
Rainer
82,909
Bonner Thomason
CRS, ABR, GRI, e-Pro
Keller Williams Realty

I usually answer first with the MLS stat and then break my stats into homes priced well and in good condition. The perception in the mindset of sellers and buyer is that is does matter. Also they do put to much weight on this as an absolute. The more we can be professional and address this the better for consumers in their expectations.

Bonner

November 07, 2007 04:24 PM
Rainmaker
223,559
Laurie Mindnich
BB, one thing that we DON'T have to worry about lately are agents using their average DOM to demonstrate their superiority...it's not something many of us want to "gloat" over!
November 07, 2007 06:16 PM
Rainmaker
136,149
Kaye Thomas
e-PRO, Manhattan Beach CA
Real Estate West
BB.. When in doubt always go with your first thought.. you were right DOM doesn't matter.. the number of sold homes iws what's important..
November 07, 2007 07:22 PM
Rainmaker
219,651
John MacArthur
Licensed Maryland/DC Realtor, Metro DC Homes
Century 21 New Millennium
BB - I suppose that the answer changes with the market. If asked today, I would have to answer "Well, in the last year, those that have sold have felt the DOM was too many and those that are still waiting to sell, the DOM has been the equivalent of Chinese water torture. (Not to be confused with water boarding which is like having an over priced listing on the market and you have no room to lower the price.)
November 07, 2007 11:35 PM
Ambassador
2,032,127
Todd Clark
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494
Keller Williams Realty

I think people ask that because they want to know how many more monthly payments they have to come up with before they get a check. I get the same question, but I've always had an answer for them. But, with the market ever changing it really doesn't matter anymore. My DOM now may not be the same in 30 days, it is an ever changing number.

November 08, 2007 12:40 AM
Rainer
55,715
Joyce Heffner-Williams
Owner/Broker/EcoBroker - Monument Real Estate
Keller Williams Client's Choice Realty - Colorado
Great insight and analysis! 
November 08, 2007 10:09 AM
Rainmaker
256,463
Alexander- Slocum
REMAX Team- Vancouver WA Real Estate
RE/MAX equity group - Vancouver Washington

Hello BB,

In my opinion most individual agent's average DOM/CDOM cannot be reliably calculated -- there won't be enough data points to provide a mathematically satisfactory answer.  We also have the added variability of the Seasonality within each typical year; along with the multi-year market cycles, complicating the lack of data-points.

For a large enough market area, such as Vancouver's, even the market area average DOM/CDOM can be very mis-leading the further north of the Median Price range one goes.  We can have a traditional Seller's Market south of the Median Price; and a Buyer's Market north of the Median Price.

I do like to look at the calculus (rate of change) for the price tiers at or near the Area's Median Price tier to help with a Seller's general expectations. 

I still put more weight on your previous post(s); when they (listings) are priced correctly, Buyer's Agents will be scheduling showings.

John 

November 08, 2007 01:27 PM
Rainmaker
908,080
Bill Gassett
Metrowest Massachusetts Real Estate
RE/MAX Executive Realty
BB - This is something I am always aware of and actually promote. Of course I wouldn't promote it if I wasn't doing a good job and getting my homes sold quicker than the average agent. Fortunately for me I am and hopefully will continue to.
November 08, 2007 03:49 PM
Rainmaker
1,084,794
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc

Hey everyone! I hope you guys are doing well today. I have been out all day working. AGAIN!!! Don't you hate it when work interferes with our blogging? There must be an easier way to make a living.

Anyway, as always thanks for stopping by and commenting. I thought this was a really good comment thread.

November 08, 2007 04:47 PM
Ambassador
1,848,792
Nestor & Katerina Gasset
Realtors, Wellington Florida Homes For Sale
International Properties and Investments LLC
Bryant- Wow! This really became one hot post! Well, DOM does not mean squat in the market we are in right now! We are getting a listing where the agent before listed the condo for X dollars when the Comps came in at Y and he kept asking her to lower the price and SHE REFUSED! Like you said, what's up with that! She refused to reduce her overpriced by about 30,000! Listing! We get asked, how long will it take to sell our house, we say, " we have to be perfectly honest, we have no idea in this market, there is no rhyme or reason in what is selling or not selling, not even price! So if another agent tells you different, they are blowing smoke up your---. Katerina
November 09, 2007 12:57 AM
Rainmaker
1,084,794
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc
Katerina, Except for the prices there doesn't seem to be much difference between our markets. I hope you are doing well today.
November 09, 2007 07:20 AM
Rainmaker
129,326
Jim Little
Your Sun City Arizona Realtor
Ken Meade Realty
Broker B, thanks for the opportunity to rant. I hate the DOM question, especially from buyers. Agents have trained buyers to ask for DOM, a dangerous figure in itself. If there were conditions of the property that caused the DOM, it doesn't tell you they have or have not been corrected. My mls, ARMLS, recently dropped DOM as a default on the agents report. It is still available, but you have to ask for it. I now tell all casual buyers it is no longer reported. If a buyer wants to get serious, I'll get it for him.
November 09, 2007 11:59 AM
Rainmaker
1,084,794
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc
Jim, Rant away my friend. I wish they would do away with DOM in our system too. Probably never happen but I can dream. 
November 09, 2007 01:57 PM
Anonymous
Spencer Barron

Personally feel that DOM is a big waste of time on its own.  What I pay attention to is DOM since a major status change or price change.  That takes a little extra effort but it's worth it.  What does it matter if a 300k home has been on the market 300 days when suddenly they dropped the price 50k and it sold the next day.  Sold for 250k in 351 days.  That would be absolutely useless information when compared to Sold in 1 day at 250k.   Wow, I just found out where the buyer's are.   Relying on DOM alone to get a grip on the market will always leave you months behind.

November 13, 2007 07:22 PM
Show All Comments
Rainmaker
1,084,794

Bryant Tutas

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