When searching the MLS for properties, Besides the actual number/amount how does the property history effect your decision to buy ?

For myself and my clients I look at DOM/CDOM, price changes and pending/back-on-market activity. These are things to take into consideration when making an offer though they are not primary factors. Primarily, one has to see, feel, and smell a property/home. Then if it is liked these factors come into play. The number of price changes and how far apart they are lets me know the urgency of the buyer. Many price changes or a wide difference between original and current asking price usually means that the seller has their head in the clouds about what the property is worth and may be unrealistic in expectations. I will carry it all the way through. In the below example, if when I found this home the C/DOM was 60 or more days, I would offer even less.

i.e. 

I saw one yesterday with no price changes, C/DOM = 30. I thought it was ripe for a low-end cosmetic flip although the price was probably a little high. I search for homes on the "lower end" or where there is lots of land, so I don't look at comps before I go visit - I want to see what the pictures don't show. 

Looking at recent comps now, nearby nicer similar home sold 1 mo ago for $9k less and with $7,500 seller concessions in closing costs. I also look at potential gain with a 1-year minimum hold; in this case, after cosmetic fixes, my starting offer price for this home for a client would be 6%-9% less than retail. Our market is going through a correction and homes are sitting a lot longer that are not priced appropriately (to me, correct pricing means they go pending in 20 days or less). 

With a 1-year hold after estimated cosmetic fixes of $10-$15k is an estimated 11.7% gain or $25k +/-. In this case, for a homeowner, the gain is larger than trending appreciation so it is a good deal. For a pro flipper, it may or may not be a good deal depending on their business model. If I was buying it, as a DIY flipper/landlord, the hold period for gain only gets better on this after the first year and the door income is +$500 per month. So what do I compare too? My other investments. It is less appreciation though more income.

As Steve mentioned, DOM plays a role. If you are in my market, where median DOM last month was 2, then any small to medium 3/2 SFR hanging out there 30+ days has probably been overpriced and might be worth a look. The question, of course, is whether or not the sellers are willing to come back down to earth yet. I'll also scan previous listings to see if I can get a general picture of how the property has been used, if there have been updates, additions, etc. I prefer to look at comps and market activity in the vicinity before deciding to make a trip to view the property. Your question was about history, but I find that the present condition of the property and neighborhood, and the general trend of the area, provide the most important info for your purchase decision.

DOM and price changes do play a role in determining how motivated a seller is. Things that you should basically ignore include what price it was last purchased at x number of years ago. Far too many people see that someone bought a house in 2010 for $150,000 and want to offer $200,000 thinking that a $50,000 return is enough for the seller even though the home may easily be worth $300,000. That might work for off market properties but not anything listed on MLS.

I think that tennessee area is a bit of an outlier along with some of the coastal areas and other hot areas.  2 Days on Market (and I'm guessing that was not a typo) is crazy. :-)

In terms of whether the property history affects my decision  to buy, I'm assuming you mean my methodology for putting in offer.

For me, I will rarely put in a significantly low ball offer if a house has only been on the market less than 2 months. Once it hits that two month period, then I start to consider it for a notable discount - especially in the winter.

In addition, I also want to use any previous contracts that have fallen through and adjust my offer accordingly. If you know the seller (be it a bank or an individual) have had a deal or two fall through, then you might want to be sure to include a quick close (2 weeks), high earnest money and no contingency offer. 

They might take a more significant discount than one would think - especially a bank - if they can see you're that confident in yourself closing.  Once a buyer gets burned by a deal falling through they tend to be awfully gun shy before they tie up the house with another buyer again. And if they have a choice between an additional 5k to 10k versus a more likely close, they might just take the more likely close.

Those would be the two things I would give consideration to pricing history.

That and maybe when I see sellers doing price discounts of 1k or so, then I tend not to bother. Anybody that does that kind of nonsense doesn't really have a clue what they're doing and probably aren't going to discount it enough for me to make the numbers work anyway.

Yes @Mike H. , it's a little nuts here in middle Tennessee right now!  2 is for the past 30 days in my target market.  For all of  Rutherford county, it was median 5 DOM.  That's even faster than in Nashville-Davidson County (next county over), where median DOM was 13.  Median DOM for both counties, going back 12 months, is 8 days.  Yeah, nuts.

@Aaron Lovett

so given those kind of crazy DOM numbers, how are the builders doing over there? And wouldn't they be building as much as they possibly could? I realized DOM for spec homes is vastly different. But ultimately, with a DOM of 2 (2!!!!!!), don't they have to believe that they're never going to find a better time to build than right now? :-)

Builders? "If you build it, they will come, and pay a premium for the pleasure of living there." Builders can't keep up. Yes, DOM for new construction is significantly longer - one reason being that they get thrown up on the MLS before ground has broken... Nashville is also a very different market for builders than Rutherford county. In Nashville, we look for zoning to allow building two SFRs on one lot. Fortunately we have more land to work with just 15 minutes away. =) Nashville is also dealing with some housing affordability and gentrification issues - when all the builders are trying to tear down the older homes and put up modern mansions, things become complicated in the big picture. It's an interesting place to be in real estate!