Why 'Days on Market' is a Key Metric When Selling a House
What’s really measured by days on market, and the implications this figure has for homebuyers and sellers alike.
The number of days a home has been on the market can change the way a buyer makes an offer. For a neighborhood or market, the average days on market can reveal a lot about local demand for housing.(Getty Images)
When you’re trying to buy or sell a home, it’s important to take advantage of all the data that’s at your disposal. “Days on market” is an especially critical number to take into account. But what does this number actually mean, and why does it matter for your real estate transaction?
What Does Days on Market Measure?
When we talk about days on market, we’re talking about the amount of time the home is posted on the multiple listing service, or MLS, which allows real estate agents to search for local properties for sale. The timer starts whenever a house is officially listed on the market, and it ends when the seller has a signed and accepted contract with the buyer.
So, when you’re browsing real estate sites and you come across a home that has their days on market listed as one or two, that means the place was just listed. Chances are, it hasn’t had very many, if any, showings yet.
By contrast, if the home has 100 days on market, that means the seller has been trying to find a buyer for a long time – and things aren’t going well.
So what days on market tells you is more than just how long the place has been for sale. It also provides insight into how the house has been perceived by buyers in general.
Interpreting Days on Market
To that end, it’s important to understand some of the ways in which days on market can impact the sale of your home.
We’ll offer a couple of illustrations. Imagine that a buyer makes an offer on your home after being listed on the market for 48 hours. As a seller, you may not feel very desperate to cut a deal – after all, you just listed the place – and as such, you may be pretty rigid about the sale price. The buyer, meanwhile, will know that the house is new to the market, and will expect you to be pretty hard-lined about what you will and won’t accept. The offer you get will probably be fairly close to the list price.
In a second illustration, imagine that your home has been on the market for 45 days. Buyers will assume that you’ve had a lot of showings but not a lot of offers – and they may even assume you’re getting antsy to sell. Maybe even antsy enough to accept their offer, even if it’s fairly lower than anticipated. And they may be right. Questioning whether another offer will come your way, you may take the deal.
Both illustrate a simple point: It’s important to sell your home quickly. The longer it’s listed on the market, the harder it’s going to be for you to negotiate a deal aligned with your asking price.
When it comes to tips for selling your home, a lot of it boils down to this: Make a strong first impression so you can get some good offers right out of the gate.
But how can you do this? For those wondering how to sell your house fast, what steps should you take?
Tips for Selling Your House as Quickly as Possible
Minimizing your days on market boils down to a few things.
First, get the pricing right. This is critical. If you overprice your home, it may languish on the market for days, weeks or even months. The best real estate agents will help you figure out the sweet spot that maximizes your return while still attracting buyers.
In fact, pricing your home too low may actually work in your favor by inciting a bidding war, depending on the current available inventory in your area.
Second, make sure your home looks move-in ready right out of the gate by staging it with the right furniture and finishing touches. You only have one chance to make a first impression.
Next, be mindful of the time of year. Putting your home on the market in spring or summer is almost always preferable to selling in the off-season. If you can wait until peak time, you’re more likely to have buyer interest and sell more quickly than in a cold market.
Finally, posting on social media can speed up your home sale by spreading the word to your personal network and beyond. Sometimes, a buyer could be closer than you think in the form of a friend, neighbor or relative, or someone in their social spheres. The more eyes on your listing, the better.