Buying your dream house on the market may not always come easy. If it’s that great, chances are, there may also be other people who are vying to buy the home. So how can you create an offer that the seller can’t say no to without sacrificing too much on your budget?
While sellers generally go for the highest offer price, others may still consider timeline and proof of buyer credibility. And one way to know how open a seller is to negotiation is by looking at his DOM.
DOM is the time the house has been sitting on the multiple listing service (MLS). Real estate agents for buyers and sellers use this metric to understand how reliable the listing is — price-wise, location-wise, and house-condition wise. So in this article, we summarize the implications of different DOMS to help you start crafting that irresistible home offer.
Low DOM means that houses are selling fast. One way to know if the DOM of your house is low or high is to find out the average DOM of recently sold homes and house for sale in your specific area of interest. For the State of Georgia, the average DOM as of the 1st quarter of 2021 is 41 days, but it would be best to zoom in onto your town or neighbourhood. If you are working with an agent, your agent can scour the MLS to determine this.
If the DOM of your neighbourhood has been consistently low, here’s what it means for you:
1. The Market Is Hot
If, for example, the average DOM in your area is 25 days, and the majority of the houses were sold in less than 25 days, this simply means that that location is in demand. Low DOM can be tricky for you as a buyer because you’ll have competition. In this situation, you’ll have to step up your game and create a very compelling offer.
2. Low Chance of Reducing the Asking Price
Plenty of competition means that you can’t negotiate for a lower price as much. But think about it, high demand should mean that there is so much more to the property, right? If you haven’t heard about it yet, maybe city officials are planning some big developments in the area. That could give you more equity in the future!
3. The House was Relisted
Are you sure the house has a low DOM? When sellers change their agents or take the listing down for some time and put it again for sale, the DOM reflected on the MLS resets. This can be a sneaky tactic to give the impression that the listing is new, when in truth, it has been sitting on the market for a long time! To avoid this, make sure that your agent really knows how to look into the house’s history.
A relatively high DOM is favorable for buyers. This means that you have more bargaining power to lower the asking price. But be careful! If your dream house has been on the market for quite some time, this may mean that there is something wrong in the area (or the house) because others buyers are not reacting so much to it.
If the DOM of your community has been high for the last months or years, here’s what it means for you:
1. The House Is Overpriced
A house is said to be overpriced when the seller is asking for way more than his neighbourhood comps, or the value just doesn’t justify the condition of his/her house. You can also slightly tell that the price is not right if the house has a high DOM, but the price hasn’t been reduced by the seller at least once.
However, if the house is relatively overpriced, but you notice that the seller has reduced it multiple times, that would mean that you found yourself a highly motivated seller. A seller who wants to sell his/her house so bad is more open and flexible in negotiations. If this is the case, you might be able to score your dream house for a friendlier price!
2. Bad Location
The more remote the area is, the longer it would take for the houses to sell. This is because people value convenience and accessibility. When you choose your dream house, make sure to check its relative distance from social service establishments such as hospitals, food markets, and schools. In addition, if the area has a reputation of having dangerous people, houses won’t sell as quickly too. So while you make sure that the house is clean and decent, also familiarize yourself with the neighbourhood.
3. Overlooked House
This is an exception. While houses with a high DOM are generally risky, it could sometimes mean that the seller didn’t market the home efficiently. This is possible for houses under FSBO. However, it doesn’t always mean that the property is bad, overpriced, or located in an unpleasant neighbourhood. So the next time you see a house with a high DOM, think twice first before running away!
If you are looking for a real estate broker who can help you put any DOM situation to your advantage, contact us now at 770-668-4888!