Does Number of Days on MLS affect your buying decisions?

Brooklyn, NY · Member since 2017 · 53 posts · 19 votes

Hello All,

I am a new investor and looking in Upstate NY for my first rental. I am currently working with a broker and she said the below statement that really changed the way I view properties under my search criteria.

"If the property has been on the MLS for more than 3 days - it probably wasn't a deal to begin with."

I would like to hear your views on this as well. Do you look at how long a property has been available for sale? Does this sway your decision to buy the property in the first place? I work a full time job and I find it a bit difficult to have enough time to analyze/visit/evaluate properties as soon as they hit MLS. Any other buyers with a full time job that can chime in on their process please?

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Matt Brown

Rental Property Investor · Nolanville, TX · Member since 2008 · 130 posts · 88 votes

@Mo Farraj

Personally, no, that situation wouldn't affect me. I do look for properties that have been on for quite some time (3 months +) as those sellers may be getting desperate and wanting to deal more.

As for it being 3 days or so, could just be not fit for someone's portfolio or they're funds are tied up and they're not able to execute. If the numbers work for you then go for it. Could still be a good deal.

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Jim Cummings
Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
7y
There are only Four reasons a property sits a long time on market:
1. Price!
2. Location!
3. Condition!
4. Ease of Showing!
Even more straightforward, if you'll get the price "Right" regardless of the other factors - it will Sell!
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Amir Nahidi
Real Estate Agent · Atlanta, GA · Member since 2018 · 1 post · 0 votes
7y
@Mo Farraj
Numbers of days on MLS does affect buyers decision if the property has not generated any leads or offer in months. That will cause buyers to think that the house has structural/ hard to fix problems but definitely not for a short period of time (3 days).
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William C.
Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes
7y
@Mo Farraj I actually subscribe to the notion that anything on the market for more than 3 days is over priced. That is not to say "deals" don't ever slip through the cracks, because they do. I tend to look at the entire marketing history of the property to get the story, they could have started off way too high, and incrementally lowered it to the point they are now, fair market value, but buyers see 600 days on market and assume the worst. I also tend to think this thought process is more often true when talking about retail sales, or homes that end buyers are looking to buy. For many reasons, foreclosures, properties that need work, etc. seem to get lost in the cracks a bit more.
So to answer your question, No, I would never allow the DOM to affect my actual BUYING decisions, but I do look at DOM along with the rest of the marketing history to try and piece together a story and use it to help in the "shopping" and research process.
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Philip Coiro
Flipper/Rehabber · Member since 2018 · 87 posts · 67 votes
7y
@Mo Farraj
It is true that if it's on the MLS in a place where investors are active, it's probably not the steal of a lifetime. With that said, every investor has different costs of doing business so what may not be a deal for most investors may be for you.
I purchased my first flip last month on a house that had been sitting for over a year and no one wanted to deal with it or didn’t see the potential. I moved on it and if my research is correct it should be a nice property for me, I won’t really know until we hit the market next month but we feel pretty strong that the house will do what we need it to do.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
7y
Not necessarily true, although truer now than it was 4 years ago. I bought a couple of things off MLS that have been great properties that were languishing there. One of them was my "cat piss" house, another was an estate sale where one bedroom and bathroom had been turned into a hair salon. So it was a 2-1 at that point. Cat piss house I bought & remodeled at 45% of its current value, and hair salon house I bought & remodeled at about 50% of its current value.
You can get good deals off the MLS, you just have to be able to have vision where everyone else sees problems.
I try to use original price and days on market to my offer advantage. I generally know every house on the MLS in my area that's for sale over the past 24 months, including how much it was originally offered for, how many times it was "pending" and fell out of contract, etc. This gives me a little bit of insight into the seller if I want to come in with an offer.
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Joseph Walsh
Brookfield, WI · Member since 2016 · 191 posts · 108 votes
7y
One of the properties I am looking at right now has been on the market (and vacant) a LONG time. I expect to use that as justification that the asking price is just way too high. (and it is). Combined with what I know they paid to buy it 6 years ago, and that they have done NOTHING to the property except maybe neglect, that "on market" time has value, if you are looking for "values" in the sense of owner that might be willing to consider a lower offer. It's how I got my current home at a discount rate. In this case, they are asking 79k, I plan to offer 53k, and expect they will jump at it.
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Josue Vargas
Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
7y
In my area, I found it works either way, less than 3 days or more than 60 days.
Note: I like the Class A/B in good location; (1) less investors looking in this area, (2) lot of retail market offers, (3) I need to be aggressive and time is very important.
Even then, I find most deals gone to other buyers with better offers within 24 hours, which is fine because I know it will take time. Frustrating but part of the business.
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Mo Farraj
OP
Brooklyn, NY · Member since 2017 · 53 posts · 19 votes
7y
@Jim Cummings Great way of putting it, thank you for the reply!
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David DiCenso
Executive Financial and Operations Specialist · Alpharetta, GA · Member since 2015 · 4 posts · 1 vote
7y
Mo,
A follow up to your question from Monday 2/20/19. You asked if there are many other metrics and there are. For convenience, I found a summary doc from Than Merrill today about "Performing A Rental Property Analysis: 8 Factors to Consider." I'm not sure if I am able to embed an URL in this forum.
https://www.fortunebuilders.com/rental-property-ca...
The obvious few are quality schools - rated in comparison to the state and country-wide performance stats, house location to these important amenities, parks, ideal tenants, Property type, vacancy rates, hospital and big box grocery in close proximity.
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Mo Farraj
OP
Brooklyn, NY · Member since 2017 · 53 posts · 19 votes
7y
@David DiCenso Thank you again David, a ton of great info in your post and link you've sent over.
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David LeckoPro Member
Rental Property Investor · Indianapolis, IN · Member since 2015 · 178 posts · 107 votes
7y
@Mo Farraj I have used the number of days on the MLS as a filter then made lower offers to those houses that have been listed for many days. I have purchased 2 properties that were 200 and 300 days old on the MLS, and both of them were awesome deals better than 1% rule. 412 Jenny Ln in Carmel, IN bought for $190,000 rents for $2025 /mo and 6844 Keystone Ave, Indianapolis, IN paid $104,000 rents for $1250 / mo. Both deals on my blog.
@Mark Mesedahl huge thank you for the shout out! I appreciate it.
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