The Good, The Bad, & The Ugly DOM

I’m going to a wedding this weekend in Kennebunkport, Maine. Saturday – 19 degrees with a wind chill of 6 degrees. That is one ugly temperature!  No, W didn’t invite me. Our dear friends Ann and Frank are celebrating their daughter’s wedding and were kind enough to include us. Ann and Frank were one of my first clients and bought a home from me 24 years ago. Then during the hurricanes of 2005, they couldn’t get out of town with their 3 kids. They had an older home with no shutters. So, I told them to stay at our house as we had left. They ended up hanging out with the neighbors after the storm. Ann and Frank liked our community so much, they moved across the street. True story!

In Maine right now it’s sweater season. Friday night we were told to bring the ugly holiday sweater for the pre wedding party.  Most things though aren’t truly ugly but fall in the good or bad category.

And they can be good and bad at the same time. The sun will be out for the wedding. That’s good. But the 6-degree wind chill is bad.  There is good cholesterol and bad cholesterol. If I eat fish with avocado nuts and olive oil at the wedding, it will be good. The bacon donuts though = bad cholesterol (although they taste good.)   Like the old spaghetti westerns today, Nicholas Cage (136 movies so far) flicks can also be good or bad.

In real estate good and bad days on market (DOM) are most on my mind this time of the year. We are in the twilight zone of seasonal transitions. The season is just beginning and always takes off after the first of the year.  The concern I’m seeing which I see every season, is buyers start to lose houses right now because they are confusing good and bad DOM.  Here is why, and what you need to understand about DOM if and when you are buying or selling….

In the twilight zone of moving from offseason to season,  Buyers see a home on the market for 90 or 150 days and are ready to feast like they are at the Hotel California. They think they have all the time in the world. Good for me when buying but bad for the Seller since it’s been on the market a long time.  Not so fast!  The problem is good DOM and bad DOM.

I remember one home I had years back in Frenchman’s Reserve that had activity for 6 months but never had an offer. One buyer came through and dilly dallied for three weeks. Then another came in around Jan 10th but lallygagged for a few days. Finally, both came round and made the offer on January 15… but at the same time a fresh buyer swooped in and bought it at full price. The loitering two buyers were in shock and not happy with the ugly result. I’m surprised they didn’t hire Clint to take me out! If only their Realtor had explained the good, the bad and the ugly of DOM!

I don’t look at a home that has been on right now for 150 days as bad DOM.  That’s because it’s been on the market during the bad part of the year. July, August, September, October, November, and December are the slower months. The seasonal renters left back in on April 1. Snowbirds went home a month later. And the family buyer finished up some time in June. Twice as many homes sell during the good part of season. So, DOM shouldn’t be looked at as the be all end all right now. Especially for condos and zero lot line homes which attract a heavy percentage of seasonal buyers. Even family homes need the dominos of those homes to fall as sellers of those homes or condos might be the buyer of a family home.

As a rule of thumb, I like to divide the DOM in half for a home on the market in the offseason. 150 days is like 75 days in season. A home that has been on for 75 days in April can be the opposite. It’s more like double at 150 days because it hasn’t moved during the good DOM of season.

And Sellers who sit on their house too long during the good DOM part of the season might regret not adjusting their price soon enough during season if they don’t understand good DOM. It might result in holding the house over the offseason. That would be one ugly result!

Jeff Lichtenstein, originally from Chicago, got his start in the home furnishings textile business where he traveled over 35 weeks a year selling fabrics. After the family business was sold, Jeff moved to Florida and became a real estate agent. Today he is the owner and broker of Echo Fine Properties, a luxury residential brokerage voted best brokerage of the year. Jeff manages a non-traditional model of real estate that mimics a traditional business model. Echo has 80 agents, an average of one million dollars per transaction and over 500 million in annual sales. Between traveling for work and annual family trips to national parks with his wife and 2 now adult children, Jeff has visited 49 states. He is also one of the few Chicago White Sox fans you’ll ever meet.  Some publications he has been quoted in.

Author of business & leadership book How Making a Sandwich Can Change Your World –  The Amazing Success of the PB&J Strategy – Available to Buy Now!

Feel free to ask him a question directly at jeff@EchoFineProperties.com including a complementary  valuation of your home.

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