Continuing on the MLS theme ...
The Arizona Regional Multiple Listing Service's days on market task force will be meeting Thursday to discuss the state of all things DOM (or so I presume, as this is a closed meeting.) The following is the (overwritten) e-mail I submitted to ARMLS in support of reverting to the old practice of listing only Agent Days on Market, not Cumulative Days on Market.
(If a listing expired or was cancelled less than 90 days prior to entry of a new listing, the cumulative days on market continue to, well, accumulate.)
There are many subjects debated on real estate blogs that are of interest only to Realtors and impact only Realtors. Days on Market is not one of those subjects, as it has often has made it more difficult to sell homes that are otherwise well-priced and move-in-ready.
I’m writing today in advance of Thursday’s DOM Task Force to express support for eliminating days on market from listing data or, at a minimum, eliminating cumulative days on market and allowing agent days on market to stand alone.
The theory of CDOM as a method of ending data manipulation by some real-estate professionals was logical; the unintended results, however, have been detrimental to the sale of property in the Phoenix area.
CDOM has served to stigmatize property – the first question asked by a buyer for a property with a high CDOM is “what’s wrong with the house, why is it on the market so long?” The buyers then view the home prejudicially, looking for what is wrong with the home rather than what is right, all because of a number which lacks perspective. And from a high-level perspective, CDOM is less about a given property than the market in which it is located.
CDOM can be high because a property was improperly priced for some length of time. Basic real estate theory says the most activity on a home comes at the beginning so in effect sellers who price their homes too high at the start are shooting themselves in the foot. Sellers eventually may choose a more reasonable price, often with a second agent, but the damage already has been done in the form of a high CDOM.
In the above instance, CDOM can discourage a second agent from taking a listing after expiration because of the CDOM albatross hanging from the home’s doorway. Does this in any way benefit the seller?
While used by listing and buyers’ agents alike, the MLS is at heart a listing tool. There is no equivalent on the buyers’ side (at least in Arizona), no similar mass database of buyers and the criteria they’re using for their home search. Yet this listing tool has been changed detrimentally to the sellers with the introduction of CDOM.
There always will be agents looking to circumvent the system in an effort to bolster their sales statistics. Yet that risk is hardly outweighed by the damage to sellers caused by days on market in general, and CDOM in particular. If days on market is a material concern to a buyer, the onus should be on their agent to perform the proper due diligence through the tools at their disposal, most notably the Archive report. Days on market should not be made into a material fact by the listing sheet as is currently the case.
Thank you for your consideration in this matter.
(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes
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