Days on Market

Days on market (DOM) is the total number of days a property has been actively listed for sale on the MLS or other listing platforms. For mortgage note investors, DOM is a key indicator of local market liquidity, buyer demand, and the realistic timeline for disposing of REO properties after foreclosure.

Why DOM Matters to Note Investors

Note investors do not buy properties — they buy debt. But the underlying property's marketability directly affects the note's value and the investor's resolution options. DOM helps you answer a critical question: if this loan goes to foreclosure and the property becomes REO, how quickly can I sell it?

Using DOM in Due Diligence

When evaluating a note for purchase, check DOM trends for comparable sales in the property's market. This data is available through MLS access, BPO reports, and online listing platforms.

• High DOM in the area suggests the property will be difficult to sell if you end up taking it through foreclosure. Factor in extended carrying costs — taxes, insurance, maintenance, and corporate advances — when modeling your worst-case scenario.
• Low DOM in the area means strong buyer demand, which supports faster REO disposition and reduces your downside risk. Properties in low-DOM markets also tend to hold their fair market value more reliably.
• Individual property DOM matters too. If the collateral property is currently listed and has been sitting for months, investigate why. Is it overpriced? Does it have condition issues? Is the neighborhood declining?

DOM and Property Valuation

DOM is closely linked to property valuation accuracy. Comparable sales with low DOM are stronger valuation evidence — they indicate properties that sold quickly at their listed price, reflecting genuine market value. Comps with high DOM may have sold below asking price after multiple reductions, suggesting the final sale price reflects a distressed sale rather than true FMV.

When reviewing a BPO or running your own valuation analysis, give more weight to comps that sold within 30-60 days of listing. These transactions reflect what a motivated buyer will actually pay in a reasonable timeframe — which is the number that matters when you are modeling your REO exit.

DOM in REO Disposition Strategy

If you take a property through foreclosure and need to sell it, managing DOM becomes part of your exit strategy. Properties that sit on the market too long develop stigma — buyers assume something is wrong. Price the property competitively from the start, based on current comps and market conditions, rather than listing high and chasing the market down with reductions.