Oro Valley Real Estate - Buying a Home with a Long Time on the Market
A real estate listing can tell you an awful lot about a home, beyond just the price—essential stats like the year the property was built and the price per square foot.
But one of the most important numbers to be aware of is the days on market, or DOM, the amount of time the home has been listed for sale on the multiple listing service. The DOM gives you an idea of how other buyers are reacting to the property and whether it's priced high or low.
Properties with a high DOM are commonly referred to as stale listings, meaning the house has been languishing on the market for a long time. Depending on the specifics of local housing markets, experts consider that a house starts becoming stale around three to five weeks—and it usually causes one of two possible reactions. Some buyers think such homes are a bit tainted, while others believe they'll have more bargaining power and can get the house at a steal. Which is more true?
First of all, let’s dispel the myth that there’s always something wrong with the house when it doesn’t sell quickly. There are a lot of factors that could come into play.
As homeowners progressively lower the price on the home, the perception is that something is wrong with it—and this perception sometimes keeps would-be buyers from looking at the house.
Sometimes, a high DOM may be due to factors out of the seller's control.
Perhaps the seller accepted a contract at some point, but it fell through because the buyer couldn't qualify for financing.
But the problem could also be the home itself. Outdated interiors or big-ticket items in need of repair can scare buyers away. Some people would never gamble on buying a house with roof damage.
Buyers are also turned off by homes that need a new paint job, landscaping work, and upgrades to patios, floors, and appliances.
Location is yet another factor that could stall a home’s sale.
Houses on busy roads or in a flood zone typically have longer days on market.
And, of course, bad listing photos can tarnish buyers' opinion of the house before they even set foot inside.
Deal or no deal
Does a high DOM give buyers more bargaining power? Sometimes.
When there is no demand for the home, sellers may be willing to accept less than the initial asking price.
Just be aware: Sellers aren’t always desperate, regardless of how long the home has been on the market.
Proceed with caution
You may be able to strike a deal, but the first move is to understand why or if the house is overpriced.
Is it the location, a major defect, repairs needed, or difficult sellers?
The house may seem fine, but there may be issues that are not immediately apparent.