Obviously no realtors want their area to be officially tagged as a declining market, as this scares off buyers. So they will continue to fudge the DOM data– the Washington DC MLS just did this via a convenient “rule change” wherein a home can get a new MLS list number every 90 days.

Thus, the same house can be listed twice, for 180 days total, but will not appear that way when lenders & appraisers check its DOM to see if its in a declining market.

If a house is overpriced, it is overpriced on day one of the listing agreement. On what day does it become overpriced? Day sixty? 120?

I don’t think it is an accurate measure of seller motivation either. Every seller’s circumstances are different.

Personally I do not see any reason agents should not do this. Is it deceptive? Not in any material way—it does not deceive a buyer prospect about the property in any way. The property stays the same no matter how long it’s been on the market (ceteris paribus); its time on the market does not affect the property.

Do buyers have some right to know how long a seller has had their home on the market? Not that I know of. Not telling them is not a deception either.

The most common question I hear at properties (including at open houses that I’m hosting) from buyers is: “How long has it been on the market?” Buyers believe that the longer it’s on the market, the more they have the seller over a barrel. Not necessarily true; it’s just a function of overpricing, and frankly, we know the listing is overpriced without reference to DOM. But if buyers can ask that question, it’s fair for sellers to ask, “How long have they been looking for a home?” and “How much do they have to spend?”

In addition, the biggest advantage of removing and relisting a property is not to confuzzle the DOM number, but to get the listing to pop up on new searches or searches that, as in my MLS, have a “New” category for listings less than 15 days old, and which agents often use to the exclusion of “Active” listings. That “New” status is PROVEN by experience in my market to increase showings when it is done. And that is a service to my client. I used to object to doing it, on fuzzy ethical grounds; then I looked at what successful agents in my office do: When they lower the price, they list the home as new. (My MLS totals DOM for a property’s serial listings, so it doesn’t fool agents or anyone else.) And it brings in new showings–and helps sell.

So the buyers and their agents may consider it useful information to have knowledge that a property has been on the market longer than since the last list date. So what? I work for the seller, and if that includes possibly not letting buyers know how long it’s been on the market, I don’t see any ethical issue with it. If it’s advantageous to one party to find it, and it’s advantageous to the other party to not make it obvious, why is the party demanding to know right? What right do they have to that (perceived) advantage?

I read ALOT about how realtors are held to the highest standards, but this appears to be pretty clearly an example of some level of unethical, immoral, or maybe a violation of some realtor code of ethics. If this is true, why isn’t this reported to the MLS or CAAR by all the ethical realtors that aren’t doing this?

I think DOM is relevant for a buyers negotiating position.

The house I’m currently renting was on the market before I signed my lease.

It was listed for a few months by Realtor A last year and didn’t sell. According to my neighbor, here’s what happened next: another guy, let’s call him Realtor B, trolls the MLS for listings about the expire, contacts the seller and convinces him to list with him for 30 days or 60 days, cuts the price a little, and gives it a whirl. It didn’t work with this place but he probably does it enough to get by.

With the home in question, he took one photo of the outside (which might have even been the last agent’s photo). So obviously he’s piggybacking off of the prior agent’s work and prior showings, hoping the price cut or new MLS # is going to convince a buyer to go for it.

Not totally related to the story, but there’s one guy who uses DOM!

As a buyer I think gaming the system is slimy. As long as you guys police your own, this behavior will be kept to a minimum. Like any business, something unethical done for the short term will prove harmful in the long term.

Realtors who attempt to “game the system” are harming their credibility, the integrity of the MLS, and are fooling their clients.

Just like any other dataset, DOM is subject to the quality of the data – garbage in, garbage out.

AC – To your point about getting accurate prices – wow – your comment couldn’t have come at a better time. I have been thinking about this for some time, and it came to a head today when I saw one closing entered (and I’m making these numbers up, but the discrepancy is accurate) – Asking price for the new construction property – $200k. Closing price – $275k. My assumption, and I believe it to be accurate, is that they cajoled the buyer into using their lender and then “threw in” a bunch of upgrades, bonus rooms, etc. That skews the data more than almost anything else in the MLS right now, IMHO. (You can probably figure out which builder)

Now, this seems to me Econ 101. But please don’t take me to say that everyone uses this data intelligently — I wouldn’t try to claim that. I once visited Vegas with a friend of mine, a math geek who works as an accountant for several casinos. He explained to me the ideal odds on a number of blackjack strategies. And then he explained to me the odds *as the ordinary person in Vegas actually plays blackjack*. Sheesh — the casinos are making a killing. So I understand that there’s plenty of irrationality out there in how people use data — whether the cards in their hand or the DOM data in a current real estate listing. But we shouldn’t base our decisions re: the availability of data on the dummies. That hurts the rest of us.

Again, there is no set formula. Every deal is different. But the DOM data is clearly relevant, and realtor attempts to game it are a problem.

I would like to expand the point. I think that realtors should formulate, and then enforce, a code defining conduct that amounts to MLS *and* transaction reporting abuse. “Re-listing” to re-set DOM should be out. And realtors should work with local governments to ensure that *real* prices paid for houses are recorded in municipal records. So if a buyer pays 500k for a house, but gets 50k worth of “inducements”, then the price recorded should be 450k. By inducements, I mean pay-backs (like agreements to subsidize points on a mortgage) or payments in goods (e.g., promised renovations). The problem with the way things are done now is the price data is not transparent, and so we get a BS set of prices that savvy buyers discount by some imprecise percentage. A more efficient market — which in the long run would be better for everyone — depends on more transparent pricing.

DOM is very relevant, as it shows (partially) a seller’s motivation to sell. For example –

If one house is on the market for $200k and sells in three days, it was most likely priced well.

If a house sits on the market for 300 days, priced at $200k – it’s likely overpriced.

DOM is highly relevant also when looking at how long it took for a property to go under contract and close – those that go faster tend to have been priced well. Those that took longer – weren’t priced as aggressively.

On the shoe analogy – while I don’t share Mark’s vehemence I don’t think it’s an apples-to-apples comparison. To use your analogy though, if there were two gallons of milk on the shelf, one priced at $10 and one at $5, which one would sell faster?

Houses aren’t perishable, but they do get stagnant.