There are many pieces of information a listing will reveal. This includes anything from the square footage to the year the home was built. However, one of the most important numbers to pay attention to on a listing is the days on market, or the DOM. This number helps to give you an idea of how other potential buyers are responding to the property.
Another term used to refer to homes that have been on the market for a while are stale listings. According to experts the time frame in which a house becomes “stale” is around three to five weeks. After this point, buyers tend to think two things. One – that there must be something wrong with the home. Two – that they gain more bargaining power. Are either of these true?
It’s not always as it seems
So many factors play into a home not selling quickly enough. It doesn’t necessarily mean something is wrong with the house. Here are just a few of those factors:
- The home may be overpriced.
- The home was under contract, but the contract fell through.
- The cosmetic aspects of the home may be outdated.
- The listing photos are of poor quality.
There are some larger factors that could deter potential buyers as well. These include pricier home improvements such as replacing appliances and landscaping work. And, of course, there is the location factor. Homes on busy roads or flood zones tend to have a higher DOM.
Testing the waters
Could a stale listing be used to your bargaining advantage? Maybe.
It is important to remember that the market value of a home is what a buyer is willing to pay and not what the seller expects. When the demand for a property decreases, so may the initial asking price.
However, this could backfire as well. Sometimes, the seller is just stubborn in their asking price and they are waiting for the highest offer to present itself. Ask your agent why the homeowner is selling their home to better understand where your bargaining power lies.
Some homeowners may not be in a rush to sell their home and are just feeling out the market. Others may be desperate to get out of Dodge and will be more susceptible to negotiating.
It is a difficult feat trying to find a home with a high DOM that meets every single one of your wishes. Unless you are having your home custom built, you can almost guarantee some small compromise will have to be made.
When considering a high DOM home, first ask the question as to why it has been on the market for a while. Once you have this important piece of the puzzle figured out, it is time to make your offer.
Always include home inspection contingencies in your offer. There can always be an issue that is being overlooked.
There are many pros and cons that factor into considering a stale listing. Make sure you get to know the home and the sellers very well, and always proceed with caution. However, do not completely eliminate high DOM homes from your search results. You may end up finding a diamond in the rough.