Days on Market is a common term bandied around by real estate agents as well as property websites. So what does it mean and why is it important if you are trying to sell your home? Most major real estate websites track and report how long a home has actually been on the market for sale and this is known as days on market (DOM).
Days on market is reported by REIWA our state real estate body on a regular basis and their website details the state average as well as each individual suburbs average days on market. On top of this, each agent within a suburb will have their own figures which reflect their ability to sell a home effectively within a given time – an interesting thing to consider if you are choosing an agent.
Why days on market are important
The reason DOM is kept track of is because the number gives sellers, buyers and real estate agents an idea of how well a home is being received while it is available for sale. Many issues can affect how long a home sits on the market and therefore the DOM number provides a good measure of how the home is being received.
Ideally the time for a home to get an offer is within the first 30-60 days of being on the market. If the home is on the market for longer than 60 days with no offers the seller and the real estate agent should be revisiting a number of things in order to determine why no offer has come in.
If a home is on the market for an extended period of time without an offer, buyers will often question if there is something wrong with the home that is causing it not to sell and as a result some buyers may not even consider a home with a longer than normal time on market. This negative perception from buyers can force the sellers to reduce price much faster and steeper than if the marketing and pricing were done properly during the first 30 days of the home listing.
Why do homes Stay on the market for so long?
One of the biggest reasons a home spends a long time on the market is that it is priced higher than where it should be. Pricing a home is part art and part science and many experienced real estate agents have the skills needed to guide home sellers in pricing correctly. If you decide to price your home at a point that is considered high for the area you live in, then you can expect your home to sit on the market for some time. By pricing too high you will eventually have to drop your price faster and at a steeper rate as time goes on in order to get it sold.
Ideally within the first 30 days you should be paying close attention to buyer numbers and more importantly buyer feedback. Specifically pay attention to comments about the quality of the home, how much work buyers may be saying is needed, whether buyers are saying updates are needed and comments about the price. All of the feedback is important as your home is on in ‘competition’ not ‘isolation’. Buyer will make comparisons between all homes that are on the market in the price range they are searching.
Other Reasons Homes Have Long Days On Market
Another reason why a home may be on the market longer than 60 days is poor marketing. If you are attempting to sell your home by yourself using ‘For Sale By Owner’, you should evaluate what marketing have you done for your home. Listing your home on a couple of real estate websites is not enough. You should look at the quality of the photographs for your home, how is your home staged, have you decluttered and depersonalised. Marketing is more than just getting the word out there that you have a home for sale. Price and Marketing Go Hand in Hand. If the inside of your home is not “show ready” then buyers will not be impressed and less likely to even want to make an offer.
If you are working with a real estate agent and are receiving less than stellar marketing results, you may want to sit down with your agent and discuss what their approach is to marketing your home. Of course no amount of marketing is going to help sell a home that is over-priced or unprepared to be shown, so make sure you look at every aspect of your home sale to include parts that you control as well as parts your agents control.
The bottom line!
The amount of time a home spends on the market is looked at by buyers and real estate agent and may even be used as a reason not to consider a home. By pricing your home right and marketing it properly you should expect to have plenty of buyers and an offer in hand within the first 30-60 days of being on the market. If your home has not sold and is starting to spend too much time on the market it may be time to step back and re-evaluate your home price and marketing plan.
Buyers in the modern marketplace are time poor and are searching and evaluating properties at a faster speed than ever. Coupled with the most well researched buyers the market has ever seen and you have a recipe for disaster if your home is over-priced. When buyers are searching for homes on their iPads – with a flick if their finger your home can be discarded due to over pricing and bad marketing. Trying to get buyers to re-engage with your property is a hard road and one that usually requires one of two solutions, a price reduction or money spent on marketing