Ah, the oldest trick in the book, where real estate clerks pull their listing off of the laughable MLS and then put it right back on, resetting the "Days on Market" number to zero.
Look - Fresh Listing! Come and Get it While it's HOT!
Yeah, right.
Now, if Google or Zillow (or both when Google buys Zillow) would finally get off their ass and give us a legitimate MLS, which is just a simple database, then potential homedebtors would know the truth.
Until then, we're stuck with the corrupt NAR, sleazy real estate clerks, and deception as the norm. It is nice to see the MSM picking up the anti-REIC ball and running with it now...
New Listing! (Sort Of) - Agents are pulling houses off the market and then presenting them as new offerings
Real estate agent Ross Simone wasn't attracting any potential buyers for a house in Mechanicsville, Md., that had sat on the market for months, so last November he took action. He pulled the house out of the regional database of active listings and then immediately reinserted it, changing the property ID number used to track properties over time. The result: The house appeared to be hitting the market for the first time.
"It's in the best interests of my client [the seller]," Simone said in a November interview. "I started doing it consistently this year. I do it as much as I can."
With open houses as quiet as death lately in many parts of the country, sellers' agents are trying everything they can to make a sale, including sometimes tweaking the computerized data that potential buyers depend on.
Fresh listings attract attention and can fetch higher prices because buyers are less likely to make lowball offers.
Is this wrong? Many MLS organizations think so. In Massachusetts, MLS Property Information Network Inc. recently improved disclosure of sales histories. Metropolitan Regional Information Systems Inc., which covers Mechanicsville, Md., says it checks its listings nightly for violations. In fact, it says it eventually caught and corrected Ross Simone's gambit, which was first pointed out by the Southern Maryland Housing Bubble News blog.
January 18, 2007
BusinessWeek turns the spotlight on real estate clerk deception - the "days on market" scam
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36 comments:
Fight the REIC!
What about if they pull the listing and re-post it with a new/different price or other changes to the listing (more/nicer pics etc)?
I think this is a problem but it's a bigger issue in areas that have been more impacted by the slowdown. Last Spring, I tried to dig a little deeper into it by looking at withdrawn and expired listings as a proxy for refreshed properties. I compared sales data over the same period for four years. Now that the year is over, I might do a full year analysis if I find some time.
In saying it's a problem, it should also be noted that it's only really a problem statistically. For individual home buyers, it's easily resolved.
Once a client is serious about a property (ready to write an offer), I'll dig into the sales and ownership history. This includes the number of times it has been listed, for how long, mortgage/ownership history, and any information I can find on the seller's motivation. Given the amount of money most buyers pay their agent, basic due diligence should be expected.
If you're sans agent, you can and should do this basic research for yourself. How depends on your locality, but ownership records can usually be found at the county clerk or recorder's office. Start your home search early, don't chase the "new listings" right off the bat, and automated listing alerts will eventually will show you the relisted/refreshed properties.
First, DOM is vastly over-rated.
Second, MLS's are fixing this by having a cumulative days on market (CDOM) where as even if a seller hires a new listing broker, the CDOM continues to rise with each passing day.
It's funny. Much of the stuff you bitch about in regards to real estate clerks was already underway. Now I suppose you will try to take credit for whatever improvement there is.
Osman,
It might be nice to discuss the Realtors(TRADEMARK) Code of Ethics that says "members won't do anything to deceive a buyer or seller." Or, you could discuss state laws that govern real estate licensing that spelling out that "agents won't do anything to deceive buyers or sellers." You might even discuss how when the MLS's themselves have rules against this practice, that enforcement, fear of enforcement, and punishment could best be described as non-existent...
Yeah Todd, their fixing this...
Read how here!
Todd, if the NAR and real estate clerks are cleaning up their corrupt ways, then you have a shot (a small one) of keeping your job.
Are they also making enforceable changes to:
1) stop builder bribes being paid (co-brokes)
2) stop bribes being paid and received to/from appraisers and mortgage brokers?
3) Open the MLS to any interested party?
4) dramatically reduce commissions?
5) require a university degree for any real estate clerk?
6) adopt a "no disinformation and spin" platform for the NAR
I could go on and on. But I won't. Your career and your profession are over. You just don't see it yet.
In recent months, the relist (refresh) practice has been increasingly viewed by segments of the real estate community, including the California Association of REALTORS®, as potentially confusing to all parties involved (consumers and real estate professionals).
The National Association of REALTORS® has not taken a formal stance on the issue and has left it to the discretion of local MLS’s to set their own policies with respect to relisting practices. A September 21 article in Inman News illustrated how difficult an issue this is for MLS’s all over the country
The Massachusetts Buyers Agents Association did a study last year, I believe looking at DOM for Middlesex County properties. There findings were very disturbing - 1 in 4 properties had been pulled from the MLS and relisted. Homes that had lingered on the market for several months, with several price changes, appeared on "hot sheets" as new to the market. When agents were questioned about falsifying the data they appeared surprised that it was a big deal. Apparently the MLSPin has taken steps to make this no longer possible, but I'm sure that it's only a matter of time that a new tactic will be tried. Ironically, what looked to be a hot market was really just the opposite and many buyers may have paid too much.
Maybe Todd and Osman could elaborate on this from the code:
Article 2
REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.
"Liz Provo said...
The Massachusetts Buyers Agents Association did a study last year......Ironically, what looked to be a hot market was really just the opposite and many buyers may have paid too much."
Paid too much? According to whom? A buyer is in the market for a house (or any product for that matter,) buyer sees house, buyer likes house, buyer contacts seller (or seller's agent,) seller gives price, buyer does or DOES NOT DO his homework, buyer ether agrees, negotiates, or walks away. Once the price has mutually been agreed on, one would assume that the price is acceptable to the buyer!
Like Goldilocks its "not too hot, not too cold, but just right"
The sale price is always what the buyer is willing to pay. Otherwise it would be a different sale price.
No matter how much advertising, mis-advertising, spin, outright lies, whatever, go into a product; the end game is always the same.
YOU saw it, YOU liked it, YOU did or did not reasarch it, YOU decided that the price was right, and YOU bought it!
The old saying "Let The Buyer Beware" has been around sooooooo long, and yet people still ignore it.
Solution is simple. All of us make a bid on every house for sale at 52% asking price.
That'll re-set some expectations.
Consider it a favour to the market.
-Big Cheese
Would someone here PLEASE PLEASE PLEASE explain to me why "days on market" has ANY logical relevance? If I were looking for a home to buy, I could not possibly care less how long it's been on the market. SO WHAT if it's been on the market for 30 days or 300 days - the right buyer simply hasn't come along. AND PLEASE - don't give me the lame excuse "Well, there must be something wrong with it..."
If your getting a price decrease you don't need to re-list .The realtors are re-listing to hide the prior days on the market and get new action on the listing .
The problem is why should people at the same time listen to the realtor facts on the stats on "days on market ",if realtors mess with it .
Once again it boils down to the psychology of the Simpsons!
Patch Tuesday said...
Maybe Todd and Osman could elaborate on this from the code:
Article 2
REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.
Thursday, January 18, 2007 2:52:48 PM
----------------
.........that's more of a GUIDELINE than a RULE........
if a home is priced correctly (i.e. a price where the market finds it acceptable) it will sell
if not, it languishes on the DOM
Human nature assumes that something that nobody wants has something wrong with it. That is why days on the market is loathed when it gets long in the tooth.
Human nature also focuses on price, and if its priced out of your range you just do not even look at it & assume the seller would not accept your offer.
High & low is all relative. The only reason homes are sitting on the market is because seller's are pricing the units too high and buyers just are not looking at them because they've sobered up and realized they were buying into a bubble.
Once sellers drop price, days on market will only be a problem for homes that have true flaws in structure & location.
Todd Tarson,
If DOM is overrated, then why are RE clerks pulling this scam? Why does the MLS have to fix this issue if it is a non-issue? What is the point of CDOM if DOM doesn't matter?
1) stop builder bribes being paid (co-brokes)
It is still legal to pay for services. I guess builders think that by offering an incredibly high premium it will help them sell homes faster. I question whether or not this is a good marketing ploy.
It hasn't worked on me, it won't work on me. I offer an up front negotiated flat fee with my buyer clients. It's less than 3% on a $200,000 property sale ($2000 less in fact). Whatever the seller is paying me does not come into play.
Find me some data that offering a higher than normal co-broke of X% is aiding the sale of homes against those who aren't offering one. I still haven't seen it.
Bottom line, buyers still have control over what property they want to purchase, and for how much, AND for how much they want to pay for representation.
2) stop bribes being paid and received to/from appraisers and mortgage brokers?
It is against the law. I welcome the justice department or any attorney general to look into the matter and prosecute the offenders.
3) Open the MLS to any interested party?
It already is. IDX links are on every realtor clerk's web site.
Zillow.com and plenty others offer the ability to list any property for sale for free. In a short period of time, more listings will be featured on sites like that than in the MLS.
The controlling interests of MLS across the country already screwed the pooch for the most part for the future of MLS.
4) dramatically reduce commissions?
Dramatically?? I thought fees for service were negotiable?? Show me something, anything that says they aren't. You can't.
There are agents and brokers that offer services for less than 6%, plenty of them. If one doesn't want to pay say 6% for listing representation, then they shouldn't.
If real estate clerks are all starving as you say they are, then I bet most of us would take less than 6%. Just have enough balls to demand the price you would want to pay. If that broker won't do it, find one that will or sell it yourself.
5) require a university degree for any real estate clerk?
Why?? Plenty of morons have a degree. This solves nothing. Each state government has a real estate department. It's up to those governments to make the change you want to see, not NAR.
6) adopt a "no disinformation and spin" platform for the NAR
Ignore NAR. I know it is difficult for you because of the jones you have for Lereah and the gang... but ignore them.
There are simple ways to protect yourself from this relisting scheme...
If DOM is overrated, then why are RE clerks pulling this scam? Why does the MLS have to fix this issue if it is a non-issue? What is the point of CDOM if DOM doesn't matter?
I'm saying it is over-rated as far as marketing goes.
I feel RE agents pull this scam because they are able to say that they sell property faster on average vs. their competition. I don't agree with them.
I think MLS's are trying to fix whatever issue there is because other Members of the MLS and the public have complained. I know of MLS organizations where the penalty is a $1,000 fine if caught manipulating the data in this manner.
I have better things to do than to create a whole new listing on a property so that I can get the clock reset to zero for the DOM. I won't do it even for a seller that may request it (and it has been requested before by sellers). I'll simply fire my client if they insists on me doing this 'scam' or practice.
I will say that I think DOM should be included with any IDX link that appears on agents websites. Just my opinion. I think it may help buyers by giving them more information to help them make the best decision possible.
The reason I like CDOM is because there are occasions where a listing expires with one broker and the seller hires a different representative. When that happens normally the clock goes back to zero. I freely give information like DOM to my buyer clients in an effort to offer the best information for them to use. I also let my buyers know the original listing price (if there have been price reductions) for the same reasons.
I'll add that I'm not as comfortable as an agent representing both the buyer and a seller in the same transaction. I do my best to avoid that situation and in 5 plus years I've only been on both sides maybe 10 times, not including land sales.
Land sales are the exception around my parts because usually the deals are much smaller (think 4 or low 5 figures), are paid in cash, and don't involve improved property (mainly speculation). Even so, I still haven't done all that much two sided representation.
I think that my client deserves all the information that I can give them to base their decisions on. These aren't my decisions after all, I'm not the one shelling out the money for the property. It is only fair that the client gets any and all applicable information before they make decisions. DOM and CDOM would fall under the applicable information category.
But I still feel it is over-rated information.
Keith,
Geez, what do you have personally against ALL real estate people (and Im not one, really)
some are good, or very good, others arent, same with integrity..
personally, I think its like any other businessperson, there are plenty of nice honest people , as well as scuzzy unethical ones in any office in america, whether it be sales, IT, finance, etc..
NOt saying that all realtors are great, but cant believe the pure hatred as a class- many are just decent people that want to make a living and some really do want to help people and many put client interests first- others dont
and believe it or not there are some in that business that dont even need the money, just enjoy the job
again, IM not a realtor, believe it or not, but if you look at all these posts as a whole it seems REALLY personal and biased..
just my two cents...
Wall Street Journal reports that a Maryland Court has held a lender liable for option ARM loan not clearly explained. Bank has to rescind loans. Oh My!!!
http://online.wsj.com/google_login.html?url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB116908538496979726.html%3Fmod%3Dgooglenews_wsj
I like Todd Tarson for being a RE Clerk that does three things.
1. Picking a name and linking to his blog.
2. Having an intelligent discussion.
3. Not getting hostile.
I wish more RE Clerks would post like Todd and Osman. Most members of the REIC come on as anons and act like jackasses. Even when I don't agree (and I don't agree with Todd in this case), I enjoy seeing what realtors have to say when they do it in a positive mannor.
I have better things to do than to create a whole new listing on a property so that I can get the clock reset to zero for the DOM. I won't do it even for a seller that may request it (and it has been requested before by sellers). I'll simply fire my client if they insists on me doing this 'scam' or practice.
Er, you mean you'll quit. You can't fire your boss!
David - I agree 100%. Todd adds to the blog. He seems to be drinking less of the NAR / Greg Swann kool-aid lately, has stopped hating the bubble bloggers and is trying rational discourse, is posting some good stuff, is more level headed, and is almost like an anti-George-Bush-Republican - in other words, realizes there is a problem in his house and is looking to fix it, and make positive change.
In the end, it'll be smart for business to do what Todd and Osman are doing, and also that one realtor who wrote us that stinging anti-NAR post.
And it will be REALLY FRICKING STUPID to do what Greg Swann is doing. But then again, he's not a real realtor anyway, I think you have to sell some houses to be one of those.
Anyway, Todd, you're good by me. We don't agree on much, but you seem (now) like a stand up guy. Be a part of the solution, not the problem.
Just watch your back with Athol/Swann/Lereah/etc.
In the area I’m in, the MLS has two categories, DOM and DOMP, the latter being the total number of days on the market. But the first one is the one that really makes a difference in the grand scheme of things especially for purposes of searching the MLS and this discussion.
The reason for “re-listing” the property is to get a fresh days-on-market (DOM). There are a two main reasons for wanting a low DOM:
One is to try and trick consumers who have idiot agents into thinking that the property just hit the market. A property that’s been on the market for a long time always has the question “What’s wrong with it?” asked by potential buyers. No seller want that negative stigma about their property because it hurts the chances of potential buyers coming through. And the longer the home has been on the market, the greater chance for a low-ball offer.
Another reason for wanting a low DOM is because most agents search for “new” properties that have come on the market since the last time they searched for properties that fit their client’s criteria (say 5 days ago). Some agents don’t keep track of changes to existing homes on the market. Because of that, they may not realize that the home they saw on the MLS a month ago is now $25K less and finally within their client’s comfort price range. (I could rant for a while on this topic, but that’s for another day)
The ways to get around a truthful DOM are easy and for the MLS to say that they check it nightly is hard to believe. If it was truly the case, then why are there still so many properties on the market with this issue. I personally think that we should just get rid of DOM all together. That will solve the issue immediately.
The deceitful listing agent, shady seller who asks the agent to do it and the idiot buyer’s agent who doesn’t know the difference between DOM and DOMP are primarily to blame. You can also blame the local MLS for not putting safeguards into place to prevent this from happening. Hell, just throw the book at the whole industry and the shady sellers!
Can someone post the link from Businees Week.
Anonymous said...
“Would someone here PLEASE PLEASE PLEASE explain to me why "days on market" has ANY logical relevance? If I were looking for a home to buy, I could not possibly care less how long it's been on the market. SO WHAT if it's been on the market for 30 days or 300 days - the right buyer simply hasn't come along. AND PLEASE - don't give me the lame excuse "Well, there must be something wrong with it..." “
If you were told that the average days on market was 3, what conclusions would you draw? What if you were told that the average days on market was 200?
The REI generates stats using, in my case MRIS numbers. These numbers are unquestionably skewed and unless you are constantly following the market yourself (not relying on your RE agent) you’d never know the condition of the market. Furthermore, what other stats are skewed? If “DOM is vastly over-rated”, maybe they think that average/median selling price is also overrated (there are indications that these numbers are also skewed).
I’m not suggesting that the spread is 197 points, but look at some previous comments:
Osman said...
“In saying it's a problem, it should also be noted that it's only really a problem statistically. For individual home buyers, it's easily resolved.”
How would one easily resolve the actual average DOM for local market conditions? It’s that kind of two dimensional thinking that leads me to believe that either these REI “professionals” are that stupid or, they are trying there best to fool some folks.
I think it’s the latter:
Todd Tarson said...
“First, DOM is vastly over-rated.
Second, MLS's are fixing this by having a cumulative days on market (CDOM) where as even if a seller hires a new listing broker, the CDOM continues to rise with each passing day.
It's funny. Much of the stuff you bitch about in regards to real estate clerks was already underway. Now I suppose you will try to take credit for whatever improvement there is.”
If the DOM is “over rated”, there would be no need to re-list, nor a need to “fix this by having a cumulative days on market”. These guys have been caught with their pants down.
Many MLS systems list cumulative days on market now so you can tell how many days it really has been on the market. You have to take it off for 90 days before the counter resets.
If the DOM is “over rated”, there would be no need to re-list, nor a need to “fix this by having a cumulative days on market”. These guys have been caught with their pants down.
Yes... there is abuse of the system in regards to DOM. I believe the statistic was originally put into the MLS for good intent (for informational purposes).
The abuse I most know about is when an agent re-creates a listing for marketing purposes. With the DOM clocks reset this agent might be able to state that he sells homes faster than his competition, trying to lure sellers into listing with him.
There is a rather large MLS that is fining Members to the tune of $1,000 for this violation. Why?? Because other Members complained about the tactic.
Manipulating DOM has no real effect, in my opinion, on a real estate transaction. Yes I do pass along such information as DOM to my buying clients so they have as much information as possible to help them make a decision. But in reality whatever is listed on DOM really doesn't mean much to a buyer that is fond of a property and feels he has offered.
As a Member of the Board of Directors of our new regional MLS in part of the woods, our concern about DOM manipulation is mostly over the average days on market.
For instance, if I'm doing a price comparison for a prospective seller and many agents were manipulating DOM to a lower figure... I'm going to think that the average prices are about right when they may actually be too high. It can make it more difficult to set a proper price for the buying market.
It is not in my best interest as a paying Member of the MLS to offer faulty data. It makes my job more difficult than it needs to be.
Maybe this is why MLS organizations are so adamant about not letting in non-realtors have access to the data base. Why?? Because there are already enough idiots that don't know how to enter reliable listing data.
(for the record, I see horrible data on FSBO web sites as well, it's just that realtors should know better so I don't give the same amount of slack as I do a non-represented seller)
Anyway, Todd, you're good by me. We don't agree on much, but you seem (now) like a stand up guy. Be a part of the solution, not the problem.
I just call it like I see it. When you are wrong (in my opinion) about something I'll be here. Yep, we don't agree a ton on the subject manner... yet we actually are almost on the same side of the issue... but you'd have to look real hard to find it.
Just watch your back with Athol/Swann/Lereah/etc.
Athol and Greg have very similar viewpoints as I have. I consider both a friend in the business and would gladly refer my best clients to each and know those clients would be treated honestly. They do this business a great service.
Contrary to popular bubble blog belief, Lereah has no mind control device over the vast US population. I doubt you could ever find one home buyer that has ever stated that the reason they bought a home was because of Lereah's writings.
Besides, I track my own numbers because I only sell property in one community in Arizona. Lereah's numbers don't do anything for me. I frankly could care less how the market is in another part of the country.
But I've said it before, I've sat through Lereah's presentations at NAR functions. He was right on about most things in 2006.
Robert,
It has nothing to do with the right buyer. It has to do with the right price. In my area, if a home is priced correctly, the home will sell within the average DOM. If I see a property with a DOM over the average, I can tell you immediately that it's not priced correctly for what it is.
This is the negative stigma that 99% of buyers have when looking at info on properties. I hear "What's wrong with the home?" or "It must be overpriced if it's been on the market this long!"
It does make a difference and that's why agents do it. Like I said, let's just get rid of it.
If we really needed the data for stats, then why not just make it an internal function in the database, but not available to the general public, agents and consumers alike?
"Second, MLS's are fixing this by having a cumulative days on market (CDOM) where as even if a seller hires a new listing broker, the CDOM continues to rise with each passing day."
Partially true. Except the MLS Cumulative Days on Market can be gamed, and frequently is. Listing agents still re-list and change the address (or other data) slightly and voila, zero Cumulative Days on Market and zero Agent Days on Market. When I report them, the MLS often does correct the malfeasance, but even a handful of sticklers can not fix 50,000 listings.
Danilo Bogdanovic said...
“Robert,
It has nothing to do with the right buyer. It has to do with the right price. In my area, if a home is priced correctly, the home will sell within the average DOM. If I see a property with a DOM over the average, I can tell you immediately that it's not priced correctly for what it is.”
What is the average DOM for your area? How do you derive average DOM for your area?
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