exposure time versus actual DOM

[Linda Klug]

My subject has a DOM of 142 days, in a market where similar homes sold in less than 30 days. No seasonal cyclical reason, similar market period, similar quality, age, conditon, etc. Just can see no logical reason for extended DOM. I need some help expressing to UW that variables are unlimited, but a way that someone out there has done so, and was found acceptable. Grasshopper thanks the master(s) ..

 

[Lee Lansford]

First, the market is not perfect. Second, frankly, if the subject was on the market for 142 days prior to contract, who cares? Some folks just get too nit-picky regarding inconsequential details.

As to "similar homes sold in less than 30 days", are you certain that this result is not due to frequent re-listings resulting in a skewed to the lesser "typical" DOM?

 

[J Grant]

Just state it simply, that marketing times vary and that some homes exhibit shorter or longer days on market variances due to variances in buyer activity, access to homes not on lockboxes, and listing supply.

The above is a generic statement that would be acceptable as 142 days is still reasonable, it's not like the subject sat for 300 days.

However, you may also want to check listing price of subject, was it as low as the competing homes that sold in 30 days? Did it start out listed higher, then was reduced ? Look at the other homes listing history, it could be they were on the market at a higher list price, taken off, then put back on.

Some sellers make it hard to show thiier house, and won't put it on a lock box. You may want to check briefly with listing realtor of subject if that was the case.

 

[Restrain]

Exposure time is a function of your scope of work. Historical DOM reflects the various sales in the market, the individual seller desires, and the market reaction to the individual sales. When you are estimating the MV for a property, with Exposure Time, you are forecasting that, based on a "general" analysis of market trends, the subject will have a MV of $X if exposed on the market for Y days. Y days is reflective of a realistic market trend, again based on your definition for MV as expressed in your report.

So, you have the definition of MV that you have to consider, for example, the most "probable price" someone would pay as opposed to a definition stating "the highest price" someone would pay.

On top of that, the assignment may place constraints on your Exposure Time. It is not uncommon for REO assignments to have quick-sale requirements. The same applies to relocation assignments.

All that being said, the 30-day sales in your market may be reflective of the typical arms-length sales, or the 140 day sale may be more reflective. Time to look harder at the sales histories, make phone calls, do historical CMAs, etc to get your answer for historical trends, recognizing that historical trends may not be reflective of the current trend.

 

[Linda Klug]

Thanks guys.. I hear you, I am getting paranoid , trying to fend off the riduculous stips and questions, to save myself revisiting a prefectly good report. I have researched all of the data/ possible reasons that you suggested, thus my dilema , saw nothing " factual" , which is of course what the UW really wants to see. That said, yes , I agree, it is what it is,.. for what ever reason, the realtor didn't speak english, and only answered his phone on the first Tuesday of the month.. ??

 

[J Grant]

If your clients are making you that self douting, might want to take a bit more proactive stance with them and/or get some new clients...a client coming back with ridiculous stips on every report can demoralize a person and make them second guess everything.

PS, you just answered your own question...if the realtor doesn't speak english and hardly ever answers the phone, that would make it harder to sell a house and add to marketing time.

 

[Sid Holderly]

Some sellers do not make it easy to see the house, 24 or 48 hour notice, only they have the key, can only show when listing agent is available an so on or very picky on the purchase agreement end. many buyers its today or never to see the house.

 

[Mr Rex]

You might ask the RE agents their opinion. Often the sellers will not clear the clutter, get rid of the cigarette or dog/cat odors, paint the purple rooms a neutral color etc until some time passes and they start to listen to the RE agent and become more proactive.

 

[Restrain]

And the seller has an unrealistic estimate of value, holds the price too high for several months, finally reduces it and sells it in 30-60 days. Wife was looking at one this last week, DOM was 930. Finally got an appraisal, reduced the price, went under contract in under 30 days.

 

[Terrel L. Shields]

am getting paranoid , trying to fend off the riduculous stips

defensive appraising leads to mistakes. Just be aware of it.

Simple statistics says that outliers are possible and, if fact, likely.

I do know a house on the market for over 3 years that actually should have not been on the market for over 6 months. The reason was 3 fold. One, it was priced well above market and had a basement that is abnormal for this area, few houses having them. But the worst problem was the owner's son who lived with her. He was surly and would but in when people were being shown the house. One agent asked the old lady to send him to town while she showed the house. He was so suspecious of the agents he would go to other agents and ask them to check to see if the listing was in the MLS.

The old lady needs to put him on a cruise ship then sell the house. It is not uncommon for the seller to be a jerk and that often kills the deal before one is ever tendered.