The Debate Over Resetting Days On Market and DOM In General

Though it's been a topic of discussion for some time now, Days On Market (DOM) has really been picking up steam lately. There are debates going on all over the place at the moment regarding the practice of resetting DOM and whether DOM should be used at all.

The practice of resetting DOM is a fairly common one used by agents to make a listing "fresh" in the minds of other agents and consumers (mainly consumers). Since there is a negative stigma surrounding properties that have an above-average DOM, sellers and agents feel as though they need to engage in this practice to remain competitive, even if it means breaking the rules.

There are different sets of rules and guidelines regarding whether you can reset DOM and, if so, when and how. These rules are set by the local Multiple Listing Service (MLS) in that particular area, but most MLS' make it fairly easy to engage in this practice.

The other debate is over whether DOM should be eliminated altogether. Yes, DOM does help illustrate real estate market trends and is used for that purpose on the back end by agents, brokers, economists, the media, etc. But should it be used by buyers and sellers? What purpose does it serve? What are the pros and cons of DOM? These are all questions that need to looked at and answered honestly.

I personally think that DOM is a complete sham. Yes, it’s useful on the back end to track trends in the real estate market conditions. But we should keep it there, on the back-end. Having it on the front-end is completely irelevant and detrimental to sellers and buyers.

For example, I’ve had buyers who wanted to preview property "A" because it was “new on the market” (7 DOM) while they did not want to preview property "B" because it had been on the market for over 4 months and “was obviously overpriced or something was wrong with it”.

The reality of it was that property "B" was in mediocre condition and overpriced while property "A"  was exactly what they were looking for and actually priced under market value since they dropped the price a about a week before. In fact, despite property "A" appearing as though it had only been on the market for 7 days, it had been listed on the market for over 7 months, but the agent/broker had gamed the MLS system and reset the DOM.

Because of DOM, the buyer wanted to eliminate a property that was ideal for them and priced under market value while proceeding with a property that was not ideal for them and overpriced. This would have hurt the buyer as well as the honest seller/agent who adjusted the price to under market value just days before.

Real estate is the only (non-perishable) commodity that uses this type of system. You don’t walk into Best Buy and ask how long a particular digital camera has been on their shelf and use that as a determining factor whether to buy it or not. You just know by looking at the price and features whether it’s worth that price to you or not.

This is why I feel that DOM hurts buyers and sellers and should be eliminated on the front-end.

I realize that even if eliminating DOM on the front end was on the agenda of local MLS', it would take some time to enact. That is why I think that, in the mean time, every MLS should make resetting DOM extremely difficult and heavily fine those that try to game the system.

D

Comments

[Jim Duncan]

In my honest opinion, those Realtors who choose to "game" the system are doing more than gaming, they are betraying their professional obligation to MLS' data integrity. They're dishonest. Sure, others are doing it, but it's not right, and it doesn't benefit anyone other than those who don't know any better.

[Jennifer Kirby]

Our MLS took care of this by adding a CDOM, combined days on the market, next to the DOM. The CDOM looks at all the active listings so that agents cannot game the system by cancelling and then relisting the property. Its a great feature, especially when doing research. Only agents can see the DOM and CDOM data...it is not available on the Customer property versions.

[Danilo Bogdanovic]

Jim - I agree with you 100 percent. The problem is that they are able to do it and get away with it.

Jennifer - Yes, we have the same system here in the DC metro area. It's DOM and DOMP, the latter being the total days over the life of the tax ID. Problem is, the DOM is the one shown on listing sites, not the DOMP. And people game the system by not putting in the tax ID to get around the system.

And regardless of whether it's on the customer copy or not, it's one of the first questions out of every buyers' mouth and they expect an answer. We can't not answer their question.

[Jay seville]

Manipulating the MLS is bogus. "Realtors" who do this should be fined $1000 at least for the 1st offense. It misleads consumers and sometimes consultants willfully.

Danilo, the issue you experienced with your buyer was based on their ignorance. You already know that of course and that's where you come in :) Not all consumers are open to being educated but that's no reason to lose a critical piece of data publicly. I want to know how new a listing is and everything about its history as it plays a serious role in what kind of offer I'm going to recommend that my client make. I think buyers should have that knowledge too. Transparency, transparency, transparency. *********It also serves to hold sellers accountable who want to price too high. DOMP is sort of like a unspoken policeman of sorts--don't overprice your home or you'll get even less for it. It's great.********* I'm for consumers having all the info....And I'm for nailing hard A-holes who game the MLS or put their websites in the public internet remarks. Losers....

[Frank Borges LL0SA= Broker FranklyRealty.com]

Hey D,

The MLS fine used to be $50 for doing what I called Full of Fat (Illegal) DOM Fudging. Hope you don't mind a link:
http://blog.franklyrealty.com/2007/01/mls-data-fudging-by-realtors-watch-out.html

After BusinessWeek got this blog and other information, they did a story where they quoted MRIS about this practice. Suddenly a month or so later the fine went up to $1,000 for Realtors fudging the TaxID# so as to reset BOTH DOMM and DOMP.

On my new MLS search site, http://franklymls.com (sorry another link, feel free to edit out) I feature first the DOMP The Days on the Market Property (regardless of the # of relistings, except for illegal TAXID fudging). I don't know if any other site shows the DOMP.

I have also proposed to MRIS to have the "Original Price" on each listing be the Original price of the Original MLS listing (DOMP).

I hate DOMM and DOMP fudging.

It makes Realtors look horrible.

Frank Borges LL0SA- Broker
blog.FranklyRealty.com

[Danilo Bogdanovic]

Frank - Glad to see that you published those posts and that the MRIS reacted. But I'm not sure how good they are at policing it because it still happens.

I hate it too and is why I think it's shouldn't be used on the front end in the first place.