DOM Gaming– The Intentional Foul of Real Estate

February 16, 2007 |

There has been some talk again recently about Days On Market (DOM), and the ways in which it may or may not affect transactions, and the lengths to which agents will go to “game the system” and manipulate the DOM. I read a post about it on BloodhoundBlog, and Jim Duncan covered a change in the DOM manipulation penalties for one MLS to which he belongs. Both posts deal with the practice of agents using various techniques to make the DOM for a particular listing appear lower than it actually is.

This discussion reminds me of a perennial discussion in the officiating community– intentional fouls. As long as I have been officiating, intentional fouls have always been discussed as part of pre-season rules meetings. For those who don’t know, below is the definition of an intentional foul from the National Federation of High School Sports Basketball Rule Book:

An intentional foul is a personal or technical foul which neutralizes an opponents’ obvious advantageous position. Contact away from the ball or when not making a legitimate attempt to play the ball, specifically designed to stop or keep the clock from starting, shall be intentional. Intentional fouls may or may not be premeditated and are not based solely on the severity of the act. A foul also shall be ruled intentional if while playing the ball a player causes excessive contact with an opponent.

The intentional foul rule becomes most important at the end of close ball games. If you have ever watched a basketball game, you may have seen a close game in which the team that is losing begins fouling the team that is winning in the hope that the winning team will miss free-throws, thereby giving the losing team an opportunity to reduce the lead. The losing team is intentionally fouling the winning team. The fouls, however, are usually not intentional fouls by rule. This is a legitimate and accepted tactic. The losing team has simply decided that risking the foul penalty is worth the reward of winning the game. Of course, the rules also have a penalty for intentional fouls. That penalty is much more harsh, as it should be. This penalty is what keeps teams and players in line– most of the time.

The gaming that goes on with DOM is a similar situation. Agents have decided that the reward of resetting the DOM of a property by allowing it to expire and then simply re-listing it in the MLS (i.e.– a potential sale), is worth the risk of other agents discovering the true history, or at the worst, incurring a fine like the one mentioned in Jim’s post.

Personally, I don’t see what the big fuss is about when it comes to DOM gaming. Personally, I don’t view the issue as a matter of ethics, good or bad, right or wrong. To me, it is a lot like fouling in basketball. It is merely a tactic that comes with an associated risk. It is something of which all participants should be aware.

First of all, the DOM is not made public, so the public is not being defrauded in any way. In every MLS that I have ever seen, there is usually more than one method of discovering the true history of a listing, and many MLS’s have automatic safeguards in place to make it even easier. The wool is not being pulled over anyone’s eyes. Well at least not the eyes of anyone smart enough to know the way the system works. If there is an agent out there who doesn’t know how the system works, quite frankly, that agent deserves some wool.
It appears that the MRIS is following the basketball example, and has decided that DOM gaming falls under the category of intentional fouls. It has increased the penalty so as to hopefully deter agents from utilizing what it feels is an unfair and inappropriate tactic. Other MLS’s are free to do the same. Rather than simply talk about DOM gaming and how unfair it may be, make rules that address it, and then enforce those rules. It is amazing how easy it is to deter unwanted behavior when the rules are enforced.

Posted by Daniel | Filed Under Buying, Officiating, Selling 

Comments

4 Responses to “DOM Gaming– The Intentional Foul of Real Estate”

  1. Jim Duncan on February 16th, 2007 8:43 pm

    Daniel -

    Nice post. The problem with our MLS is that we don’t have any consequences for violations - a recipe for disaster and irrelevance.

    –Jim

    [Reply]

  2. Kevin Boer on February 20th, 2007 10:56 am

    DOM abuse was pretty rampant at our MLS until a rule change a few months ago. Now the listing has to be off for at least 30 days, I believe, or go to another broker, before the DOM count starts again.

    [Reply]

  3. FBS Blog » Blog Archive » Not another post on days on market!? on April 3rd, 2007 8:13 am

    [...] Yep, sorry.  But maybe this post is different, because we write MLS software and need to try to accommodate the many diverging views.   Wow, are there ever a lot of different ways of looking at this issue.  (Fortunately, the very cool REMBEX site and Google’s custom searching make finding all these views pretty easy.) [...]

  4. Charlottesville Real Estate to See More Accurate Days On Market Stats on September 27th, 2007 7:14 pm

    [...] I can say about this is. . .FINALLY! This should eliminate most of the DOM gaming that goes on.  I can tell you that one of the most frustrating things that I have to do for [...]

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