Southern Calif. Realtors Stop Disclosing Days on Market

Posted by: Peter Coy on July 11, 2007

Ask any real estate agent: When a house has been on the market for a long time, potential buyers figure they can drive a harder bargain. And, of course, homes are staying on the market a lot longer these days. It would make Realtors’ jobs a lot easier if would-be buyers didn’t know how long properties had been up for sale.socalmls


Consider that fact in light of a recent announcement by the Southern California Multiple Listing Service that it has decided to remove “days on market” and “cumulative days on market” data from all client reports. (The cumulative figure sums up the number of days of the original listing and subsequent relistings.)

The decision has already generated some complaints, including this one from eFinanceDirectory.com, which wrote:

Knowing how many days a home has been on the market is an important piece of information for buyers, but thanks to a new ruling, real estate agents are now able to deprive interested parties of this crucial data.
SoCalMLS says that it's not trying to conceal anything, and that MLS members are free to give the days-on-market data to clients. They just want to be able to put the numbers in proper perspective. Here's part of a statement on the MLS's website:
The bottom line is that you, the real estate professional are in the best position to explain to your customer - buyer or seller - what the true DOM figure is and what it means.
To that end, the SoCalMLS BOD, after getting input from MLS Committees and other practitioners, have decided to remove the DOM and CDOM fields from all Client reports. You will still have this information available to you in the Agent reports, which also link to the history report for each listing. The history report gives you a much more precise overview of what transpired for a particular listing. With that ammunition you should be prepared to better explain to your client the ramifications of the DOM data.

The truth is that days-on-market figures are subject to manipulation, as I've written in the magazine and on this blog. Wrong figures are worse than no figures at all. But yanking the data off of client reports is the wrong response. At a time when Realtors around the country are being investigated by federal and state authorities over potentially anti-competitive practices, removing days-on-market data from client reports seems like a step in the wrong direction.

Reader Comments

Jim Kimmons

July 11, 2007 3:14 PM

It is indeed unfortunate that these type of information-restrictive actions are still attempted by real estate associations.

The DOJ/FTC report discussed here: http://realestate.about.com/b/a/000153.htm and issued this year is very clear in its statement that the industry should be watched carefully for this type of activity, and action taken when appropriate.

Rosie Candy

July 11, 2007 4:06 PM

It is so true that in the Real Estate Business, its just but a reality that Realtor or agents said that it is for sale only for a limited amount of time so they can actually trigger "pressure for the buyer to purchase it much quicker", because if the buyer will know that the property have been up for a long time then theres this mental stage that the buyer assumes that it still will lower the price.

Don Taylor

July 11, 2007 7:08 PM

i think it's probably a GOOD idea...the current system here in Tampa Bay has the days on market ONLY tied to related MLS #...i.e the 2nd or 3rd listing DOM figure is innacurate to begin with and often people simply 'relist' after being on the market awhile in order to get a new mls # (and new DOM figure)...buyers should use LOTS of OTHER factors...it DOES help the seller, i would say

Keith

July 13, 2007 8:49 AM

Buyers and sellers are in most cases the same human beings. I sell a house, I then buy a house. These issues almost always paint the picture that there is some group of people out there who are sellers only (and they are bad people who work with realtors who are bad people to skrew the poor buyer). As a person who may sell my house, I really don't want the days on market being readly available, the same way I don't want them to know what I owe or what I orginally paid. Then when I buy my next house - I have that same playing field. I think the seller should be in control of their information.

jdj

July 13, 2007 5:15 PM

Keith,
As much as you'd like privacy with regards to your house, there is none. Your property taxes are public record and so is the purchase price. If you are such a straight-shooter concerned for fairness all around what do you have to hide?

David Sones

July 20, 2007 11:35 AM

Selling real estate is a business like any other. Contracting Sellers and Brokers have a right to choose whether or not, to disclose whatever information concerning their listing agreement that they may choose to disclose. It is no one elses business (or right to know) when exactly they entered into their business arrangement. Does Target Stores disclose their supplier contracts to consumer Buyers - is there some 'right to know' about anything pertaining to their contractual agreements with suppliers?

Consider that the Seller might have chosen to sell their own home. Would the Buyer have some sort of 'right' to know how long the Seller had been marketing his own property? This of course, doesn't mean the Buyer can't ask - but then, just how important is that information once the Buyer has seen the home, likes what the home has to offer, and has decided to make an offer to purchase it?

From another perspective on the issue of DOM, could it be said that Sellers with longer market times are likely to field (more) offers than those with fewer days on the market?

As Don Taylor astutely pointed out, re-listings can and DO occur on a regular basis - sometimes for the sole purpose of re-starting the DOM clock - so 'caveat emptor' to those who rely on those numbers in the first place. There's an old saying that 'figures never lie, but liars always figure'. Don't mourn the loss of a notoriously unreliable artifact like DOM.

On the subject of buying real estate. It all boils down to being an active, observant, and informed Buyer in the marketplace. Buying and Selling real estate is a local 'hands on' human endeavor that no statistic (or web site, or database) will ever replace - including the DOM factoid.

Kelvin Stokes

November 25, 2007 1:02 PM

Yes, it is unfortunate that the California MLS has decided to remove DOM from it's client reports. Although most MLS have similar rules and practices, they are independent and some disclose more than others, i.e. DOM; Days on Market, and MT; Market Time.

Illinois does not list the MT or DOM on client reports. However, when working with a buyer, It's the buyer's agent's responsibility to negotiate the best price for his buyer client.

Disclosing the Market time to the buyer and using this and the current credit crunch and other such pertinent factors to negotiate a lower sale price for the buyer is critical.

A buyer's agent not disclosing the total Market time to his client and not using this information to help his client negotiate a better price is counter intuitive and nonsensical.

Most buyers, and even sellers for that matter, are not as in tune with the market as Realtors and real estate agents, hence the purpose in hiring an agent. Yet, each agent has fiduciary responsibilities to his or her buyer and seller clients that he or she doesn’t have to buyer’s agent’s client or seller’s agent’s client.

For this reason it is imperative that each person in the transaction has his own exclusive representative; buyers or seller’s agent, dedicated solely to his/her client and his/her client’s needs.

I can’t tell you how many buyers run to open houses that a builder or agent has and buy directly from the sellers’ representatives - either the builder’s or seller’s agent, without giving it a second thought and, believing they are getting a special deal by doing so. Often they get more than they bargained for!

Kelvin Stokes REALTOR®
Chicago, Illinois

http://cbrkelvinrealestate.typepad.com

wilson

November 28, 2009 10:45 PM

can u call me?

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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