Days on Market. Use contract date or closing date?

[Dave Smith]

When calculating days on market which is better, to base it on the contract date or the closing date?

My MLS will calculate it both ways.

Your thoughts and comments will be greatly appreciated...

and please participate in the DOM poll.

 

[Restrain]

As most realtors and sellers will take back-up contracts and the home hasn't 'sold' until it closes (and everyone has heard closing horror stories), the days on market is until it closes. You can write contracts from now to forever, but if the the property never closes, it's still on the market.

 

[Jeff Horton]

I sencond that. It isn't off the market till it is closed

 

[Jo Ann Meyer Stratton]

We have what is called an "affidavit of value" that is filed with the deed in the county recorder's office. This affidavit is signed by the buyer and seller and states the sales price. Contracts and information from the title companies is privileged information not provided to the public. Each MLS system is different, some will show a date from the time to first entry in the system until the next action which could be closing, pending, withdrawn, cancelled, or just a posting of photo to the listing. Some realtors will be very careful to put in the date both buyer and seller signed the contract. Other realtors never enter anything except the asking price and the address in the computer. And because of the laws of the state do not have to answer any questions regarding days on market or financing. Therefore I calculate the days on market between the time I first become aware of it being offered for sale and the recorded date, when finally everyone has agreed to everything. I even have a canned statement on my USPAP Compliance addendum: "Comparable sale's closing dates are the time of recording and from recorded deed of trust. Seller concessions and contract dates are not of public record."

 

[Farm Gal]

Dave

I only use the contract date to establish changes or trends in listing periods... I like the ability to monitor it, and to numebr crunch if I start seeing changes in offering prices etc.

If the market is heating up and the numbers so say in terms of list/contract date... combined with list to sale ratios, then I start looking for signs of real market change in terms of $$.

But the one line answer: (as other posters)
it isn't closed til it is CLOSED, and that means recorded,
so DOM as reported in my books is 'close date'.

Regards!
Lee Ann

 

[Ken in Arkansas]

In calculating the DOM I use the contract date. Using the closing date also takes into account time for repairs that have to be made to a property prior to closing, credit gliches on the part of the buyer that have to be addressed, and title problems that may develope. These tend to be buyer and property specific, and do not have anything to do with DOM. A more valid description might be to list the days from listing to closing (for what that might be worth).

 

[rtubbs]

I agree with Ken, the contract date is the most accepted means for calculating dom (our MLS uses pending date). I think the use of the closing date would be a little misleading.

Example: you list your home for sale on May 1, 2002; you get a valid contract on May 2, 2002; the contract specifies that closing will not take place until July 1, 2002 (buyer is moving in from out of town, or whatever). Your house was exposed to the market for 1 day, not 60 days. The examples to where contract date would not be valid are endless.

 

[larryhaskell]

Due to the uncertainties of the data provided in MLS and other sources, there is probably no best way. Establish your own method for determining if there are marketing trends in your area which is a separate issue. The three closed sales in your report is probably not a trend. The main point is whether you use the contract date, closing date or some other indicator, simply disclose to the reader the method you utilized and let them decide if its an issue. If they have questions, trust me, they will call. Best regards.

 

[Ross (CO)]

Our MLS also uses the status of a "pending" sale of a listing when a contract has been received. If a pending sale should fail to close, the listing history often will show a BOM (back on market) date as they try again. I will always search the full listing history for that address, and NOT just that specific and current listing. It is not surprising to reveal the prior and linked listings, where one had expired or was cancelled, only to emerge again later same day or 1 day later as the proverbial "New" listing, perhaps at a lower price and maybe not, yet often with a different agent, but NOT always. I will go back to the very first date in that history and conclude the total length of days of market exposure and offer that in the report. Some can go back into year 2001, are linked and are fair game to include. I will often observe that very first list price and look at how it closed and was recorded. The %-of-list (to sale price) this portrays is sometimes quite astounding and really shows what the marketplace thought of the house in the beginning of the attempt to sell and that early offering price ! Those that contract in 8 days at 100% of list are priced right, the buying party recognizes that, and the house very often is neat, clean and updated.

 

[Rick Hess]

8O Seems to me if a house contracts out in 8 days @ 100% list, then it is underpriced and the buyers REALLY understand that.

Brick