Taking the mystery out of days on market
April 19, 2007
Days On Market continues to be somewhat controversial in some areas of the country and widely misunderstood by many readers. The following is a quick tutorial of the meaning as it applies to our MLS (MRIS with a coverage area of the Washington Metro region):MRIS tracks "days on the market" in two convenient and important ways. They are referred to as DOMM and DOMP:
- DOMM: Defined as days on the market - MLS. This is the number of days on the market that a property is "active" from the list date of the current listing. Current listing you ask? Yes, current. A home can be withdrawn from the market, a listing may expire or it may be taken "temporarily" off the market for completely valid reasons. The MLS stops counting days (DOMM) for any of the these reasons in addition to a property changing status to "contract." If a property then comes back on the market (for instance: a contract is voided for some reason) with the SAME MLS ID number, counting days in DOMM resumes. In this case, DOMM and DOMP will be equal. Read on to see what happens if a property comes back on the market with a different MLS ID.
- DOMP: Defined as total days on the market for this property. If a listing comes off the market for reasons stated above and then comes back on the market with a new MLS ID within 180 days of the last "off" date, DOMM is reset to zero BUT DOMP continues counting days from the first (original) list date. A property can go on and off the market many times but, as long as it is within 180 days of the last "off" date, DOMP continues counting.
- How is DOMM/DOMP controlled? It is through the unique Tax ID that is assigned every property by the county in which it resides.
- Can a property have more than one MLS ID at the same time? Yes. Some are very valid. In fact, I had a listing in a community of townhouses that were also referred to as "patio homes." To be sure this property was recognized in distinct searches (town home and patio home) I listed it twice. But, because of the tax id, they were linked and both listings tracked the same DOMP even though the "list date was different." After settlement, I closed one with a status of SOLD and withdrew the duplicate. Can't close both with SOLD.
- Are there other ways to "game" the system? Probably. And, some may have figured it out.
- Are there penalties for being caught manipulating DOMM/DOMP? YES from a warning on the first discovery to several thousand dollars in penalties and/or suspension. An agent's broker can be fined too. The key word in the rules and regulations are "material." Days on the market is a material fact that both agents and consumers have a right to know to make an intelligent, informed real estate business decision.
- Are the rules and fines for violations made public? Yes. Here is the link to the MRIS Compliance section of the public Website.
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Alex, Harriet: Lets see if we can sort this out. There are over 1,000,000 real estate agents in the US. Brokers hold special licenses and are charged with the responsibility to "oversee" and "ensure" that agents are abiding by the laws, regulations and ethics of the industry. Brokers can be liable for the misdeeds of their agents.
Agents are "independent contractors." We are not employees of the broker in the traditional sense. The vast, VAST majority of us just want to do a good job for our clients and earn a decent living playing by the rules. But, there are people in this business that look out for their own interests ahead of their clients. There are people more focused on the "commission" or fees than trying to build a reputable business, not to mention providing the best advice and guidance to their clients. These people will use whatever tactic is available to maximize their income. Fraud is rampant in the industry, but it is rampant everywhere there is money involved.
So, the industry MUST self regulate, not only to find the rule violators but, to protect the consumer which we are charged to do by real estate law, regulation and a code of ethics.
This business attracted people to the "easy money" in the good times. Just like it attracted the investors and flippers. The good times are over, the investors and flippers are going somewhere else, and now is an important time for the industry to protect consumers from the people that are not smart enough to get out of the business and are still looking for the easy money and will employ all sorts of techniques to earn "the commission."
A perfectly good reason to hire a real estate consultant that does not get paid for an outcome. A real estate sales person gets conflicted with commissions. A consultant gets paid for reasoned, experienced advice. (Sorry for the self serving plug).
Vern, Priceless!
"I'd like to make an appeal to everybody who does not need to sell to take your home off the market," said Marianne Zoll of the Re/Max 5 Star/Zoll Real Estate & Auction Team.
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070425/BUSINESS/704250309
Harriet, another technical triumph! I added more instruction for the code word. Thanks for testing this for me.
Merv
A Ha! It worked !!
That was my problem - there was no code word when I'd type in the answer, click "Preview", and then click "Submit" after that. (I submitted something earlier today).
And now for something completely different -- a test comment --
I'm going to submit this comment without clicking the "Preview" button as I normally do, after carefully typing in the answer to the question of the meaning of life, the universe, and everything (not really, just the answer to Merv's question).
Alex,
If the industry doesn't self-regulate, I see a world of hurt coming (in the form of the sullying of the term "Realtor", which would be such a disservice to ethical real estate agents). This recent "boom" or "bubble" has drawn those who probably shouldn't be real estate salespeople into the fray. It might be nice to have a bit of a cleaning up.
I follow another real estate agent's blog over in California -- his website is called "www.bubbleinfo.com". Interestingly, his approach is that if a listing has been on the market for two weeks with no offers, then it's time to lower. http://www.bubbleinfo.com/journal/2007/4/15/bad-listing-agent.html
It would be such a sigh of relief for the market around here and make real estate truly "liquid" if sellers were more committed to selling by reducing the price. Two weeks seems a short time frame for me, but it might indeed create a sense of urgency with buyers. Kind of like when I used to shop at a discount clothing store. Their practice was to lower prices based on time. So you knew you could either take it now, or risk that it would be lowered and someone else would grab it at even more of a bargain price. Sometimes your instinct was to buy it first and not wait.
Thanks for continuing to update the site and stats. I've seen the DOMM/DOMP thing abused many times lately. When someone sees a house on the market for over 100 days, they generally think "what's wrong with it?" or "it's overpriced". I keep my eye on a particular area of VA and easily spot when agents re-list homes with maybe a minor price reduction (or none at all). I think it's not quite as bad when they have a large reduction in price, but is still playing with the numbers.
I think this should be CLOSELY monitored and enforced. By why would the industry want to regulate itself on this point? It would cost them business!
Notice: I really don't care if you want to remain anonymous when you comment. But, when you use my name and a phony email address using my name, your comments will be deleted without regard to content. I receive email spam constantly from those that use my email addresses in the "from" header and those are deleted immediately as well.
I am open to engaging in a "civil" debate about any relevant subject or about what I write. But, I am not willing to turn this Blog into a shouting, biased, talk radio format.
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