What is the difference between a Berks County home that has been on the market ten days and a Berks County home that has been on the market 300 days? Answer…290 Days on the market! While that answer may be mathematically and factually correct, the answer may be different if you are a Berks County home buyer or a seller as it relates to value.
When I do a cost analysis (“CMA”) with a prospective home seller, there are several variables to consider. One of them is homes that have recently sold that are similar to the sellers’ home. Obviously, the sold price of the comparable homes is a significant factor. It is also important to consider the original listing price of the home, subsequent price changes (if any) and total days on the market.
In this case, the days on market (“DOM”) are broken down into periods between price changes. We can then estimate where to price the sellers home and where not to. In this case, “DOM” helps us avoid making the same pricing mistake other home sellers with similar properties have made.
Buyers in Berks County and around the country ask many questions when shopping for homes. There are some issues raised with a high consistency like “What is the Price”, “Why are they moving” and “How long has the home been on the market”. The latter two questions are the start of a possible negotiation. The buyer is attempting to gather the information that may assist them in buying a home at the lowest possible cost. Of particular notice is many of these questions get asked before the prospective buyer has visited the home.
Buyers have access to the same information agents’ use relating to price, “DOM” and many other home factors. The only thing not posted online is why the seller is moving unless it is a short sale or bank foreclosure (REO). They also do not have what’s known as the “PMP”.
Several years ago the multi-list system that governs Berks County, Trend MLS, decided to add a separate category known as Previous Marketing Period or “PMP”. Now we have Days on Market “DOM” and “PMP”. Here is the difference…A home is listed by a Berks County real estate Broker for 90 days, and the home does not sell. The seller chooses a different real estate broker, and the home is back on the market within three days. Ten days pass and the home has not yet sold. Now the “DOM” is listed as 10 Days but the “PMP displays as 100 Days. If the seller does not relist their home for 30 or more days, from the expiration of the previous listing, then the “PMP” resets to 0 Days.
The “PMP” is listed to disclose the actual days on market to agents, appraisers, and buyers. You see, some agents and brokerages would remove or withdraw a home from the market because the “DOM” was high. They then put the home back on the market as a new listing with a new MLS number. This showed one day on the market instead of the actual time on the market.
Today it does not matter whether you have “PMP” or “DOM” on the MLS. Every home in Berks County has a public record. Part of the public record is the property marketing history. It shows any and all information about when a house is listed, for how much and if it sold (and for how much), expired or was withdrawn. The public record marketing history goes back approximately 15 to 20 years. Information such as this is readily available to a prospective buyer and is often found on real estate home search websites like Trulia.com and Zillow.com.
A home that has been on the market an excessively long time can get stigmatized. In other words, buyers may feel there is something wrong with the property, it is overpriced or both. One thing few consider is how lenders look at days on market from an appraisal value standpoint. If the “DOM” is high in a neighborhood, the lenders can rate the area a high risk or decreasing value zone. Yes, “DOM” is considered a factor in home appraising.
Too many homes in Berks County are listed high and later sell for less than the market value. This often happens because of advanced “DOM”. The best way to avoid excessive “DOM” is to value your Berks County home correctly. This is often be accomplished by working with a “WER”…Well, Educated REALTOR®. Didn’t think I would let you drift into the holidays without at least one selfless plug, did you?
Knowledge is Power!