The Macomb County Michigan Real Estate Blog

As a buyer's agent I find days on the market helpful.  Especially when my client is deciding on the price they want to offer.  A seller whose home has been on the market for 7 days is not going to be nearly as negotiable as a seller whose home has been on the market for 240 days.  I like to be able to give my buyer as much information as possible about the home before we make an offer.

If the listing agent in our market puts the listing in as a new listing it has a * beside it meaning that it has been on the market before.  If I see the star I know that I need to look in the archive history to get the full story. 

Marchel:

I too have been a buyers agent. My point is that the MLS should promote, protect & assist the seller first. Without a seller (listing) there would be no buyer agent using the MLS.

The fact that a "*" is posted next to the listing in your MLS, is a nice touch for a buyer agent, but is it working in the best interest of the seller (listing)?

A buyer agent can assist the buyer in many ways. They can use the MLS, door knock a neighborhood, read the newspapers looking for fsbo's, call the buyer agents past customers in their database to see if anyone would like to sell. The list could go on & on.

To summarize, the fact that a buyer agent may use the MLS to assist their client the buyer, should not come before the best interest of the seller (listing).

Thanks,

Our appraisers use the mls and DOM is one of the essential elements in determining value.  It is also essential for us to price homes correctly to show sellers who are motivated by time the drawbacks of high pricing!

Renee:

The appraisers can determine the value of a property by accessing public data records, the cost approach or maybe the income approach. What does the appraiser use to appraise a FSBO property? Our MLS? Would they be able to appraise a property without the MLS? I certainly think so. They can compare the style, size, age, location and improvements of comparable properties.

Sellers who are motivated by time, can look at the list of comparable properties which are active and which have sold to learn timing information. The quicker they desire a sale, the lower on the list of comps they should price their property. After all, the days on market is just an average, and their property is not just average, but better than their neighbors.

Thanks!

Hi David -

I see that you are passionate about this by the multiple posts you have entered on the subject.  I still am not sure why. 

The Sales Comparison or Market Approach is the Approach that Appraisers rely on most heavily (in most circumstances).  As an appraiser, I use the DOM/CDOM field all the time.  It is (as Rita mentioned) an essential element to determining whether a property was possibly under or over valued upon initial listing.  If there was a 'sale fail' that made the DOM higher, it is usually listed in the notes. 

I do quite a few appraisals for FSBO clients who want to determine what to list their house at.  I always ask them how long they anticipate it being on the market.  The DOM on historic sales gives me information that is relayed to the FSBO seller so that they are prepared for how long a property is on the market.

As a consumer, I would want to know what my Realtor's DOM average is before determining whether I should use them as a listing agent. 

In short, the more (accurate) MLS information, the better.

Sara,

Not only am I passionate about the DOM issue, I am correct!

I am a real estate Broker working in the best interest of my client the seller. You are an appraiser working in the best interest of your client, usually the buyer/bank. I understand your position. My position is that the MLS should always protect the best interest of the seller first. The data starts with the seller. The active DOM and CDOM statistic should be removed. If only sub agents used the MLS, it would not be an issue.

A listing broker should not mention a "failed sale", and would not have to if the DOM was NOT posted or collected. The only reason the listing broker does this is because the "DOM clock is running".

You are correct in that the historic DOM is of value. I have no problem letting the DOM be known after the sale.

As a consumer, if the price is wrong, the MLS DOM is naturally be longer. Does that mean that the agent is no good, or that the sellers are unrealistic in their pricing? During my 17 years of experience, I have witnessed that a long DOM is almost always the result of an over expectant seller, not a weak REALTOR®.

I short, the more the MLS works for the seller, the better!

Thanks!

 Hi David -  

You are correct when you say that MLS is a listing service and if not for sellers it would not exist, but the same is true for buyers... if there is no clientele, there is no need for it - I think buyers and sellers should be well informed and treated equally.

Do you have personal examples of why DOM has not worked for you?

Sara,

There are many examples. Where do I begin? I have listed and sold thousands of properties. I can pretty much say that without exception, the DOM has always been used against me and my sellers nearly every single time an offer was written.

The buyers used DOM to justify a lower offering price. I had to defend my seller's asking price. I believe the buyers would still have made the offers even if they didn't have the DOM. If the buyers like the property, they will make an offer. In the Detroit Michigan area market, the average active DOM is now in approaching 12 months. Is collecting this data, working in the best interest of the seller?

Thanks!

In any of those instances, do you believe that the properties you were selling were a bit higher than the market was willing to pay or in every instance was it a fluke that your properties may have been on the market longer than average (assuming this is why you encountered issues)?  It sounds like supply and demand is a bit swayed in your area.  In my experience that implies that prices should be lower...

I love it when appraisers and Realtors cross swords!

I lean toward having MORE info available, but have seen how the DOM counter works against sellers in our market. Being the second Realtor, I get tagged with the DOM that the first Realtor had. Sometimes it is the agent that was ineffective, but often, it is sellers wishing it were still 2005. How does the DOM help them, even when they do come down to market price? Does not the 3 digit DOM cause the offer they finally get to be lower?

Maybe the appraisers who opt for MORE info would like the sellers true motivation as a quantified category... BK looming, divorce underway, lost a job... Let's make that part of the equation? No. More info is not always the best way to go... And I've already "been to the woodshed" today with an appraiser when I opined that maybe we could move toward true blind appraisals by having the sales price left out of their worksheets... And I was trying to defend them!

Ah, some days it just does not pay to chew through the restraints...

Hey Patrick -

Our local MLS has DOM/CDOM with realtor's IDs posted under each and so it's quite simple to see whether it is the same realtor or a new one.  And I do call the sellers agent of historic sales who will often willfully tell me the circumstance under which the house sold.  I also have access to foreclosure and pre-foreclosure information.

It still seems to me like the persons that would be most ill-effected by leaving out DOM would be the clients (buyers and sellers) - Isn't the bottom line for a realtor to get the house purchased/sold (in a timely manner) and move on to the next one?

I'm not trying to cross swords, I'm just to understand.... The instant repercussion is that when we as appraisers do not have all the information in front of us, we have to call the realtors causing the delay in a sale which holds everyone in the real estate food chain from getting paid.

David,

Are you at it again with this DOM business?  ;-)

I am glad to see that you are passionate about representing your seller clients.  I am just as passionate about representing my buyers.  We could probably use a little more passion for our clients, rather than for our own interests, in this business.  For that I applaud you.

However, I cannot support you when you advocate in favor of an unlevel playing field for buyers.   

 

 

Stefan,

I applaud you for being an exclusive buyer broker. A quick reminder that the MLS was not designed in it's infancy to work for the buyer or the buyers broker. It was designed for sub-agents of the seller. All users of the MLS were working as sub-agents of the seller, not the buyer even if the buyer was my brother. Was that when the MLS leveled the playing field? The DOM field is left over from that era. It is not relevant or necessary in the modern use of the MLS. Neither is the field displaying what the seller vacancy time after the closing is. Technically, the remarks field are subjective and not always reflective of the property either. Is it necessary in order for the buyer to make an offer?

As a buyers broker, I have used the DOM to low ball the seller. Same as all buyer brokers should do. Must do. If the DOM wasn't available I still would consult the buyer about recent sales of comparable properties in the area, price per square foot etc. DOM should not be available on any MLS display except for solds.

DOM! if you're priced right you should sell. if buyer's agents are using this against a listing agent, its all part of the selling game. as a listing agent, providing closed sales can help to make your case. its not only DOM, but also the pricing history that should come into play in any analysis.

as an appraiser we must not only review the closed sales, but also active listings. its in USPAP, so from an appraising point of view its a tool. it does helps to see that info and any comments to the contrary are simply one sided views. DOM are indicators that aid in the analysis on whether a property at a given price has sold or not within a certain time period. if typical DOM is 180 days, and a property is priced and sittting for much more, its a clear indicator that its overpriced, IMO.

it may not help the listing agent as one would prefer that info to be confidential, but the real estate profession involves more players in the game than just a listing agent. personally, it seems a little one sided to me... but that is just my opinion and obviously it differs from the blog owners opinion. i dont expect to change anyone's mind, but i expect these thoughts to be heard and at the least considered.

After a long day of dealing with agents that are impossible to get a of hold of to verify sales, i could garantee a more accurate and timely appraisal if more information was available in the MLA as mentioned above.. i.e. seller concession, money back to buyer closing costs, being notified of any distress.

its all about perspective. to a listing agent it's a harmful piece of info. to a buyers agent, its a helpful piece of info. IMO, the MLS is a record of sales, listings and transactions that are the storybook of the local market.  so we dont agree.. :)  that would be boring. if i sold over 1,000 homes, i would care less. but then again there is a big IF there. i dont sell 1,000 of homes.

 

I don't like having the DOM listed on the MLS either!  I belong to 2 different MLS's because of my office's location.  One has the DOM listed, while the other one only shows this after the house is sold.  I have had Buyers not want to go see a house because it has been on the market for a while and they assume that something is wrong with the house.  This isn't always the case. 

I am in your corner- take it to the top.  I think it would help the sale of many houses!  I know that sometimes when I see the days on market- i already have a bad taste in my mouth about the house and it probably puts out negative vibes to my clients.  Good luck on your mission.

Shanna,

Thanks for your support. But why should I be the only one taking it to the "top"?

It is important to all listing brokers and their agents and clients, the seller! It's NOT just my mission.

 

David,

While I agree that DOM can hurt home sellers, Realcomp just changed their DOM to this  Y/176/176. (For those not in the area, the "Y" means relist)  I believe this was done to "paint a true picture" of the information as per COE.

 

I suppose my first concern with omitting the DOM stats from the MLS is that a buyer might find that particular piece of information relevant in deciding whether or not they wanted to make an offer.  To that particular buyer DOM could be a material fact.  If they discover later that a "material fact" had been withheld, well... there could be he!! to pay.

The DOM appears on listings we print for clients although there's so much on the page buyers usually don't see it.  One of their first questions is usually "how long has this house been on the market?" If your MLS were to omit the DOM field, how would you answer?  Surely with nothing less than the truth and if so, what's the problem?

Let's face it, if a listing languishes on the market for an extended period of time (beyond the norms for your area), the asking price is not in line with the market.  It really is that simple. Manipulating or omitting the days on the market isn't going to solve that problem.  

You mention in a reply above that "without exception, the DOM has always been used against me and my sellers... the buyers use DOM to justify a lower offering price..."

You've been around a while so you know most buyers like to haggle with the sales price to feel like they got a deal.  That aside, the truth is that if the sellers property was indeed priced 'within the market' it would sell within the average marketing time and for near the asking price.  

Hmmm.... good points to both sides of the argument.  I find it interesting that in some markets the DOM is cumulative from agent to agent.  Over here, when a seller jumps to another brokerage, the listing essentially becomes a new listing and DOM starts at 0 again.  It's annoying when a seller switches agents just to freshen up their listing.

I wish I had found this group before I started another similar group!  I will join this one and try to catch up!

http://activerain.com/groups/MLSRulesNRegs

Very interesting points of view.  As long as the DOM in going to be in the MLS, at least it could be correct and consistent, which it is not currently.

Good points on DOA.  I too have often worried that DOM can result in DOA (Dead on Arrival)  when low ball offers come in simply because a home has been on the market a long time.  All you appraisers out there know that a lot of items determine value. Too many agents, buyers, and appaisers put too much weight on DOA. 

Jesse & Clinton: Thanks for posting.Your first paragraph is valid assuming you are working for the buyer. But aren't the listings posted by sellers agents/brokers? I guess I don't agree with "Hell to pay". To address your second paragraph, DOM should NOT be posted on the "buyers profile".  To reply to your third paragragh, in Michigan the current "norm" DOM is stretching daily/weekly. There is no "norm".

I realize that everyone likes to haggle. But DOM is not necessary info in order to make a deal. In what other purchase is this required? 

Georgina: In our market, DOM is easily obtainable with a few clicks of the mouse. It's no secret whether it's cumulative or not. Both DOM isavailable. No matter if the client switched brokers. It's a time bomb on their listing.

Gerry: Thanks for your thoughts.

Trey: Who does the listing belong to? The appraiser, buyer agent or listing broker? I don't like DOA listings either. Thanks for you input.

Hi, David
"Hell to pay" could equal having to buy the house back, pay triple damages to the buyer (AK) and/or having to deal with an ethics or surety fund complaint, etc. 

Out of curiosity, how you would answer a buyers question of "how long has this home been on the market?"  It might not be such an issue in the house were to sell in the early days of a listing, but at the point the DOM stretches past the norm (for the general market at the time the house sold) a buyer could  allege misrepresentation, even if you didn't represent the buyer.  
 
Let's say you list a house for $200,000... it languishes on the market for 187 days (average for your area at the time it sold is 84).  Buyer writes a near full price ($198,000) offer and closes but subsequently learns it had been listed for more than six months (first time buyer who didn't know to ask) from the neighbor.  Neighbor: "Man, this house was on the market forever... I didn't think they were ever going to sell it." The case could very easily be made that the buyer was damaged financially by overpaying due to not having been provided this information.

I just dealt with a property that sat on the market for almost a year. Would it have sold faster if DOM field didn't exist?  No, because the bottom dropped out of that segment of the market rendering the asking price too high buyers and other agents knew it.

Good discussion, btw.

Hello Jesse,

Fortunately, in Michigan, licensed agents/brokers cannot be sued under the Consumers Protection Act. We cannot be sued for triple damages etc.

To answer the question of the buyer, "How long has this been on the market?" If DOM was not available I could honestly say "I don't know? Would you like to make an offer based on the sold comparables?" BTW, I am in favor of posting DOM after a sale has closed. Another question is average DOM based on the days it has been listed, or average DOM until the property is sold?

If the buyer in your example paid nearly full price ($198,000), he either loved it or thought it was worth it based on other properties he looked at. Shame on him if he didn't shop enough.

My current active listing inventory is approaching 30. Nearly all of these properties have been on the market a year. Are they all over priced? Is displaying the DOM helping them? Refer to the Code and I may not be serving my clients (sellers) "best" interests displaying DOM?

Article 1

When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors^® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors^® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, Realtors^® remain obligated to treat all parties honestly. (Amended 1/01)

• Standard of Practice 1-2

The duties imposed by the Code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means.

• Standard of Practice 1-3

Realtors^®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

• Standard of Practice 1-9

I believe DOM IS confidential seller information.

The obligation of Realtors^® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law. Realtors^® shall not knowingly, during or following the termination of professional relationships with their clients:

1) reveal confidential information of clients; or

2) use confidential information of clients to the disadvantage of clients; or

3) use confidential information of clients for the Realtor^®'s advantage or the advantage of third parties unless:

a) clients consent after full disclosure; or

b) Realtors^® are required by court order; or

c) it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or

d) it is necessary to defend a Realtor^® or the Realtor^®'s employees or associates against an accusation of wrongful conduct.

Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)

Michigan is faced with the honor of having the highest risk for mortgage lenders. A high percentage of foreclosure risk. I say do away with active DOM and things will head in a positive direction. Stop using DOM against the seller!

I enjoyed reading your article.  The comments are good as well.  Why does everyone ask, when they come to an open house about the days on the market?  SO what?  I agree.

 

Donald:

They ask because they want to use the days on market number, against my client, the seller. That's why. They never ever say, "Oh, 42 days on the market, sounds about right! I'll buy it"!

Hi, David

If DOM was truly confidential information we would have to take steps to ensure it was never revealed.  It would mean we couldn't put up yard signs because at the very least the neighbors would know when it was put up for sale... we couldn't advertise it in the newspaper or online because the dates could be tracked.  Those two examples alone would constitute a breach of confidential information.

DOM will only negatively impact a sale when the listing is aging... which begs the question "why is it aging?"  The simple answer is price.   I can't really speak with any authority as to whether your listings are over priced or not, but if they are languishing on the market beyond the norm for your area, the answer is probably yes.   DOM is just the effect; price is the cause.

You state in an earlier reply "As a consumer, if the price is wrong, the MLS DOM is naturally be longer.  (I think you just answered the 'are my listings overpriced' question) Does that mean that the agent is no good, or that the sellers are unrealistic in their pricing? During my 17 years of experience, I have witnessed that a long DOM is almost always the result of an over expectant seller, not a weak REALTOR®."

Market value is not dictated by what the sellers need or want from the sale.  Any agent that bows to the whims of an unrealistic and/or uneducated seller is most definitely a weak Realtor. 

All great points in your post Dennis. A wonderful debate. I'll speak in favor of keeping CDOM and DOM on the following points. 1. The buyers will find out if they want to know. Before we started keeping DOM records buyers (and agents) would commonly knock on the neighbors doors. 2. It's material fact, public knowledge, unless there is no sign in yard. Doesn't the seller sign and date disclosures at the time of listing that are made available to prospective purchasers that would reveal the DOM? 3. Information and facts are more important to a REALTORS job more than ever before. The more the better. From a buyers or sellers perspective, what do they need a REALTOR for these days but for more information.

Wow!  What a great discussion.  I can see merits on both sides.  After reading through the post and all the comments, I'm coming down on the side of full disclosure including CDOM so the system cannot be "gamed".  I think that visibility of DOM would not only help appraisers and buyers as has been previously pointed out but could positively impact sellers as well if we correlate actives pricing and DOM.  Armed with this information, it could help us advise our clients about pricing their properties in a quickly changing market.

Don & Doug,

Thanks for your comments. Just wondering, does full disclosure include disclosing the sellers reason for selling? Isn't that after all an important "fact" that the buyer should know? Don't buyers often ask why the seller is selling?

This "fact" would better able the buyer to make an educated offer. And this "fact" would be another reason why the buyer "needs a REALTOR". 

I don't see "reason for selling" as material fact. Know one but the seller may actually know. The agent may not even know. Altghough buyers usually figure it out if they snoop enough. When a sign goes in the yard, ad goes in a publication, data goes in MLS,  I see that as public knowledge or "material fact". Maybe someone here can change my mind. Interesting debate.

David, I can certainly see your point of view and it has great merit.  For me, the scales tip in the other direction. 

To answer your question, as a listing agent my clients "reason for selling" is private information and kept confidential.  As a buyer's agent if I can get the listing agent to spill the beans (as they often do when you just let them talk) I'll absolutely pass that info along to my clients.

DOM on the other hand can be at least accurately estimated by other means.  That being the case, and for all the good reasons to have the number available, I'm for keeping it visible.

Like others, I certainly applaud your passion on the subject....but I fail to see the "big deal" about it. I cannot claim to have sold anywhere near the thousands of properties you have, so in comparison am a complete novice. However, isn't full disclosure the best policy? MLS also supplies room sizes and various other facts that may hinder full-price offers, should we take them out too? I understand that 200 days of market time isn't conducive to fielding top-dollar offers....but theoretic logic says if the house is priced properly and shows well that you're not going to run that time up, right? 

Hello Jim,

I would like to thank you and the others who have voiced their opinion about this topic. I must say that since I first vented my side of the story back in March, much has changed here in Michigan. There are virtually no buyers now looking to buy any property, so displaying "days on market" doesn't really matter much. The lions share of all listings are "over priced" :(. A good REALTOR like me would be hard pressed to assure with any degree of accuracy how much a property would sell for in 60 days, let alone a year.

It's not unusual to check the CDOM had find the "true" days on market to be north of 500 days. I guess that's OK. After all, the seller, my client, should just keep lowering their price or better yet walk away and let the bank take over?

Perhaps this little market adjustment is natural. Perhaps it's the sellers fault for over mortgaging? I am sure that the majority of REALTORS do not  explain how the DOM is used against them by the listing broker or MLS?

 

Great post to get the ActiveRain juices flowing!

When I first joined our MLS five years ago, DOM was no where to be found. A few years later, the Directors voted to add DOM to the full detail sheet along with the list date. If we print a custom detail, that information is not included.

I'd be all for removing DOM. You can back into a general time frame by the MLS number. Additionally, I like to keep on eye on the property history more than DOM - what was the property listed for initially? what is the property listed for now? Has the property been under contract and is now back active? Even as a listing agent, going to list an expired, this information is what I want to know, more so than DOM.

Hello Debbie,

I agree. The sold DOM is the only DOM that really needs to be collected and displayed. The history report is valuable as well, as long as DOM is not displayed. The listing price adjustments are valid as well. 

David- this is an awesome topic....one to really get the juices flowing, indeed! I'm looking at a listing that I'm going to show tomorrow morning: 98 days market time, $10,000 in price drops, bank owned, sold "as-is", 11x11 kitchen with vinyl floor: all things that couldaffect offer price. DOM is the least likely to affect it in this potential offer... Why would listing price adjustments be alright but not days on the market??? I'm certain if we surveyed active buyers and gave them these two scenarios that 'B' would get the lower initial offer:

A) Two homes of the exact same model in a subdivision with same everything  (general condition, appliances, flooring, upgrades, etc.) both still priced at their original list of $350,000....one has a market time of 98 days, the other 170 days.

B) A home that, regardless of market time, has dropped their price $40,000; from $390,000 to $350,000

**Would you claim that the difference in offer to listing price is going to be greater on the house with higher market time than it will with the substantial drops already???

"After all, the seller, my client, should just keep lowering their price or better yet walk away and let the bank take over?" YES!!! If a seller really wants or needs to sell a house and they and the Realtor did not price or present the home properly, it should drop! The funny thing about the market place is that homes are only worth as much as a buyer is willing to pay for them. You said so yourself, "We all know that a property sells because of one reason. Price. If there is an abundance of similar properties for sale, the seller must reduce their price."

DOM is just an indicator that the seller and Realtor didn't price or present properly to begin with. I understand that the market makes it very difficult for pricing pros to do so and that, currently, there is some measure of luck involved- but I think DOM is much less a hindrance than many other thing in the MLS listing. Thank you for provoking some thought to wake my brain up!!!!

David- I was a member of Realcomp and a Remax agent for 5 years in your market before moving North. During that time I saw office after office stop offering compensation to sub agents and Non Agents. They moved to only offering compensation to buyers brokers or a lesser comp to sub agents. Was this practice put into place to protect the seller? Real Estate One puts there disclosures on the web for everyone to see, with the date they were signed in plain view. Should disclosure statements now come after we have an excepted offer?

I can appreciate the other agents and yourself sticking up for Realtors, saying they are not the ones to blame for long market times, but a lot of the times Realtors are the ones that are making that mistake by pricing or taking listings that are overpriced. Without market times you are going to have an even harder time setting the proper price to sell the property in a timely manner. The inventories are to high to re-lie on solds alone.

I think a lot of big listing agents are upset that they are not in control of the market like they once were. And are having a hard time adjusting to younger, less expierenced agents that are working with buyers calling the shots. Could it be seasoned listing agents that controlled the inventory and to a certain degree prices do not know how to cope with this market or choose not to get into there car and work with buyers? DOM is not to blame, homes that are priced right from the beginning are still selling in a timely manner!  

The winners in Real Estate have always been the listors, now the listors that have the inventorys that still do not want to work with buyers are being past up. There costs are going through the roof and there reputations are being shattered. They have not learned how the new buyer has evolved and how to do business with them. Maybe this is part of the real estate adjustment.

 I guess you or know one in your office ever went to a listing appointment and bragged about how you sold a home in 1 day or a week. How about showing stats on the average days on market for your office compared to another office to precure a listing?