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DOM is very relevent for an active listing. Zillow will also tell you when a house has been temporarily taken off the market to reset the DOM..
There are times it's relevant and times when it's not. DOM used to be a big factor 4-5 years ago but perfectly good homes over the last few years have high DOM for no logical reason except the market. Pricing and location is a huge factor, where here a $1.5M house may "Normally" take a year to sell.
You need to know how to interpret the reasons and current market to understand DOM. We have an area where 30 DOM is exceptionally long and areas where 160 DOM would be considered not unusual.
It's all in the knowledge and interpretation of the information.
DOM is very relevent for an active listing. Zillow will also tell you when a house has been temporarily taken off the market to reset the DOM.
As I stated, Zillow provides a very detailed timeline of pricing ("pricing history"). Perhaps you should take time to check this site out before blindly criticizing it.
Oh, fer crying out loud.
I didn't look at Z? Prove it.
Z does NOT tell anyone about the $15,500 concession from the seller. No one. And does not register financial concessions from other sales, either. I think those are material facts in formulation of an offer when the question is valuation.
Z does not even tell anyone that the property closed nine days ago. Are you saying I didn't look, before you blindly pimped a pop site as an accurate real estate data site? Even Wake County has recorded the sale, but Z has not scraped it yet.
"Innocent visitors" comes to mind, when I think of the OP and agenda-driven terrible advice to look at Z or T. Better IMO to visit a real estate site when working with real estate topics.
DOM is a fun game to play, but has no direct relationship to current market value.
Remedial: "DOM" means "Days On Market." That is a measure of time, not value. It does not mean "What you should offer."
Why is it so important to rail against agents that you would want material information concealed from the OP?
I don't think 1st timers deserve to be caught up in agendas about agents, but deserve some reasonably accurate and helpful information.
Z does not equal MLS data. Not even close.
MLS shows $15,500 in financial concessions at recent sale, plus a $385 Home Warrany purchase by seller, yet Z is "accurate?"
Another new low...arguing that $385 home warranties should be factored into a CMA.
If you are going to factor in concessions, how do you factor in adjustments that may obscure the "actual" sales price of a home including: price deductions for defects/needed repairs, actual seller repair expenditures before closing and yes even adjustments in commission by the agents to make a deal happen. I have to guess that the MLS doesnt have the precision to track this data? In the end you have to assume that it is all a wash. I have looked at a fair number of properties, many with a BA (before I woke up) and dont ever recall a BA showing me comps that were adjusted for concessions. If a buyer asked you to adjust comps for home warranties, I am pretty confident you would chuckle. Sales price always has been, and always will be, a key benchmark for establishing comps.
If agents didnt encourage their sellers to provide concessions at closing, as opposed to reducing sales price, this wouldnt even be an issue. This is another example of agents trying to inflate their commission. Why on earth would a seller ever agree to pay out 15k to buyers at closing and increase their commission payment by almost 1k? Must have been acting on good advice from their friend and advocate (their selling agent)!
Quote:
DOM is nearly irrelevant, since valuation is at time of sale, not hundreds of days ago.
What about active properties that have yet to realize their "time of sale". If your buyers were looking at a home that had 400 DOM, and 3 recent price reductions, do you think that would be "relevent" information to tell them? Either way, I can guarantee you that if you have a 120 day listing agreement and it is approaching its 120th DOM, it is highly relevant to you.
Another new low...arguing that $385 home warranties should be factored into a CMA.
If you are going to factor in concessions, how do you factor in adjustments that may obscure the "actual" sales price of a home including: price deductions for defects/needed repairs, actual seller repair expenditures before closing and yes even adjustments in commission by the agents to make a deal happen. I have to guess that the MLS doesnt have the precision to track this data? In the end you have to assume that it is all a wash. I have looked at a fair number of properties, many with a BA (before I woke up) and dont ever recall a BA showing me comps that were adjusted for concessions. If a buyer asked you to adjust comps for home warranties, I am pretty confident you would chuckle. Sales price always has been, and always will be, a key benchmark for establishing comps.
So, you would conceal concessions as immaterial? We will have to disagree on that point. I think they are material and of interest.
Quote:
Originally Posted by RE Skeptic
If agents didnt encourage their sellers to provide concessions at closing, as opposed to reducing sales price, this wouldnt even be an issue. This is another example of agents trying to inflate their commission. Why on earth would a seller ever agree to pay out 15k to buyers at closing and increase their commission payment by almost 1k? Must have been acting on good advice from their friend and advocate (their selling agent)!
There are many reasons to request and agree to financial concessions. It is client-driven.
Remedial funding pointer: Some buyers have more than adequate income to service their debt, less liquid cash reserves, desire to float a low interest loan, and seller-paid closing costs can preserve cash for moving, renovation, re-decorating, etc.
The agenda to denigrate agents gratuitously, heedless of peril to a 1st time buyer, does not offer insight as to why parties may agree to concessions, and IMO potential availability of closing costs assistance from the seller should not be concealed from the OP, whether it would be $15,500 and/or $385.
Quote:
Originally Posted by RE Skeptic
What about active properties that have yet to realize their "time of sale". If your buyers were looking at a home that had 400 DOM, and 3 recent price reductions, do you think that would be "relevent" information to tell them? Either way, I can guarantee you that if you have a 120 day listing agreement and it is approaching its 120th DOM, it is highly relevant to you.
Read the title of the thread. The OP wanted to know what to offer. The data needed is best available from MLS.
OP doesn't deserve to be mislead by an agenda. Fact is helpful.
It doesn't take a rocket surgeon to figure out a reduction in purchase price vs. concessions at closing are vastly different things to many buyers. There certainly is a reason buyers ask for concessions and it has nothing to do with what a realtor wants.
It doesn't take a rocket surgeon to figure out a reduction in purchase price vs. concessions at closing are vastly different things to many buyers. There certainly is a reason buyers ask for concessions and it has nothing to do with what a realtor wants.
Concessions may benefit the buyer. It is essentially a 3-5% loan (as opposed to lowering the price). Given todays return on investment, this may be a poor long-term decision on the buyers part
Concessions are a liability (xtra commission paid) for seller and it is the listing agents responsibility to council their seller on this.
Concessions always benefit (xtra commision earned) the agents. Go figure why they are so popular.
Concessions may benefit the buyer. It is essentially a 3-5% loan (as opposed to lowering the price). Given todays return on investment, this may be a poor long-term decision on the buyers part
Concessions are a liability (xtra commission paid) for seller and it is the listing agents responsibility to council their seller on this.
Concessions always benefit (xtra commision earned) the agents. Go figure why they are so popular.
Now take the average buyer. You think they care about the cash in their pocket or if it is a poor long term decision? And now think about the average concession. Let's say it was 10K. At 6% that is a whopping $600. After splitting with a buyer's agent down to $300. After splitting with their broker is it less. Do you really think realtors are driving concessions or buyers?
I realize you really do hate realtors, but blaming them for everything you can think of only makes your arguments seem silly.
We found a house we might want to put an offer in on....they are asking $263,900, but when we researched, the tax assesment (for land + house) is only for $161,000.
I know the seller can ask anything they want for the house...but does this mean that the owner is asking above what the home is worth?
What kind of an offer should we go in with?
The house is in good condition (move-in condition), it sits on 5.5 acres with a barn, about 4 acres is currently being farmed out. Taxes are $5500/yr,. house is a bi-level, 10 years old, central air, no pool....not sure if all this matters or not with an assesment. But we are confused on if we should even bother making an offer. If it's only worth $161 then I'm sure the owner won't come down that far.
So confused! this is our first house we are trying to buy!
As another poster stated, "tax value is not market value" . .This seems to be a unique property, a house with 5.5 acres and a barn is not a simple comp and may not have many comparables, if you don't already have a realtor, hire one that specializes in such properties/areas or hire an appraiser.
The OP does not seem to know the market or how to formulate an educated guess on a price for the area...As much as I personally do not like to use an agent to represent me, this poster needs an agent to protect his interests.
Also, Zillow and Trulia are worthless tools in Texas. I look at them only to see how bad they actually are. Many of the listings in the Houston area do not show up on Zillow or Trulia b/c they are listed only on HAR and not the full MLS...this is a HUGE deal. It is unique to Houston....outside buyers who do not know this will make a poor decision.
On the other hand....NuHabitat and Sawbuck both provide non-agents with MLS data previously reserved for Realtors only in Texas....as a Non-Disclosure state this data was impossible to obtain until recently unless you had an agent.
Also in Texas especially you can not give much credence to the appraised value...its all over the place and worth what you paid for it - nothing. Two identical houses, built by the same builder, sold on the same days may vary on the appraisal rolls by as much as 30% b/c one owner was much better at protesting his property taxes than the other owner.
DOM used to be a big factor 4-5 years ago but perfectly good homes over the last few years have high DOM for no logical reason except the market.
A bad "market" is a perfectly "logical reason" for high DOM and this usually translates to softer prices. Thus, my argument that DOM is a bellweather when determining the value (the amount I am willing to offer) for a property.
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