Real estate professionals use a technique known as days on market or DOM for short that helps them to calculate the worth of a property derived from how long other homes in the neighborhood have been on the market. To establish this number, they look at the average number of sold houses over the past thirty days to six months and divide that number by the total number of comparable properties listed. Real estate agents use this method to find out if the homeowner is asking too much or if the sales in the area are being affected by an economic downturn. Sadly, this formula can sometimes be skewed to provide misleading information by real estate agents attempting to manipulate the figures to their ends.
The bottom line is that the longer a property is listed on the market the less possibility the owners have of being offered the asking price. Shaving off a few percentage points from the asking prices of Oakville real estate listings will add up to a large amount of dollars. By using the Multiple Listing Service (MLS), any real estate agent can research all of the properties that are currently available for sale and may make their own decisions about whether the properties that have been sitting a long time are overpriced or if the specific area is a drop in sales.
Real estate agents review the DOM numbers to lead their buyers in the direction of houses that have up for sale so long that the sellers might be prepared to negotiate a lower price. A lot of sellers began to realize after their house has been on the market for a long length of time that the probability of selling for their listing price goes down quite a bit, so they may be willing to consider lowering their original price. This is even true for Toronto condo listings that even though the market is very active listing at the wrong price may be a mistake.
Unfortunately, some real estate professionals attempt to falsify these numbers and try to reset the counter by taking a home off the market for couple of weeks in the hopes it when it is reinstated it will show zero number of days on the market. This practice is seen as unethical and most industry organizations have taken steps to assure that home buyers are not misled by these manipulative procedures and have created a method where agents can view all of the genuine property past, including any trials to reset. With the competitiveness of houses for sale in Toronto there is tremendous demand to have new properties for sale in an attempt to sell quickly.
The MLS utilizes two numbers to represent the DOM - referred to as the current vs. the cumulative - that give a quick snapshot of the entire past of any home's listing. This method helps determine if a seller has switched agents after the property has been available too many days on the market, so the current figure shows how long the new realtor has been dealing with the property and the cumulative figure keeps tabs of how many days total it has been for sale. This means the current number can be reset, however the collective number of days on the market continues to accrue despite the property's history, such as how many times it's been removed from the market for negotiations, escrow or was just removed while the homeowner waits for the market to recover from a recession.
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