Days on Market and Negotiating in Honolulu
May 30th, 2008 categories: Negotiating, Views of Honolulu
In my previous post on negotiating the price of a property, I state that one of the important question to ask is “How long has it been on the market?” Ah yes! The old days on market question! Days on market, or DOM, are the number of days a home has been on the market since it was listed for sale. Too many days on market should be a sign to you that a property has one or a combination of 5 different problems.
a. It is priced to high.
b. It is in poor condition
c. There is problem with the home or the neighborhood.
d. Poor marketing efforts have been made.
e. Or there is poor access to see the home.
Over the last three years, Honolulu’s real estate market has shifted from an insane seller’s market (12 to 14 days on market) to a moderate seller’s market (43 days on market at the end of April). So in May of 2008, if a property has been on the market for more than 45 days, you can assume that there are some issues keeping it from selling. Just because a property isn’t selling, doesn’t mean that the seller is all of a sudden going to become really flexible on their price. However, if a seller is going to take less it will probably happen as the DOM extends beyond 45 days. The opposite is true too.
In my experience, sellers are not very flexible immediately after a property is listed for sale. In fact, if an offer comes in too fast, sometimes a seller may believe that they priced the property too low. So if you like a property and it appears it is priced near the current market value, and it has been on the market for a short period, don’t expect to get a large reduction in the price. Consider a small reduction a major victory. Furthermore if a property doesn’t suffer from any of our 5 maladies, then expect it to sell quickly! So if you want it, plan on possibly competing for it.
In summary, be sure to determine the days on market as part of your offering strategy. Don’t rely on it solely, but be sure to get the information and add it to the mix.
By the way, today’s picture was taken on the trail above Lanikai. Since I am not a botanist, I am not sure what it is, but I found very pretty. Email me if you know what it is.
