Days On Market numbers

[Blue1]

Clients are requesting DOM for the comparable sales and looking at page 1 (neighborhood seciton) to see if it jives. If not, they want you to 'slpain.' Remember, in a rising Market no one really cared but now, with the housing 'crisis' and the FBI breathing down everyone's backside...suddenly the lenders actually want a credible appraisal....

 

[Frederick]

I do not trust them. I show them, but I research them first. Often you wil find a "reset" by looking for the property's expired/withdrawn's also. I like to lok at the listing history as well. Property listed at $300K, on the market for 700 days. Price dropped to $210,000, sold in 90 days. What is the DOM? 790 or 90? (assuming typical marketing time is 3 to 6 months?)

In my gut I agree with you but I think when you take it appart the answer is clear.

If the question is: How long do homes take to sell when they are typically marketed and appropriately priced?

Then 90 days is the time it took to sell it when it was appropriately priced.

If the question is : How long will it take to get $300K for this property?

The answer is something over 790 days.

I think the answer to the first question is the one they are seeking.

It seems to me that those prior listings are not relevant to the analysis because they fail to illustrate a serious marketing effort supported by market data. When I say that I am taking into account an analysis of the trend in values wether increasin g or decreasing when the agent is forecasting the probable sold price and assigning a competitive list price.

 

[Marcia Langley]

Frederick,

Your point is valid. However, in my market agents withdraw and re-list listings at the exact same price with high frequency. And the MLS does not have a cumulative extraction. So it's manual research for each address, always.

Also, agents sometimes lower their list price $500.00 at a time. On a median priced property the difference between "appropriately" priced, and not, may be a matter of degree requiring a judgement call.

The same subjective analysis must be made for a single listing with long DOM that made large reductions in price over time. Finding that point where it could be said to have reached an "appropriate" price will also require manual research.


Appraisers are obligated to know how their data sources count items before they use them in their analysis and to use them in a logical way. Markets that have very logical data sources are lucky.

 

[incognito]

It seems to me to be a SOW issue more than anything else. More and more clients require DOM for the comparables (and comparable listings). Accept an assignment with that as a part of the scope, and you must do it. As a matter of habit, I give 3 listings on all reports, and DOM on all sales and listings, just because more and more, it is being required by clients, and is being "perceived" as necessary by most clients. It I were lending MY money, I certainly would want to know the DOM for the comparables and Listings. Lately, I have been writing my appraisals from that perspective...

 

[Kevin A. Spellman]

I have been hosting DOM for well over fifteen years. I find it to be a reliable factor for a discussion in the market approach with respect to the adjustments in either direction.