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January 19, 2007
Everything Old Is New Again
"Everything Old Is New Again" isn't just a song; it's a real-estate sales strategy. When properties sit on the market too long and get stale, some agents yank them briefly, then put them back on the market. Depending on the jurisdiction, this gets them to pop up on the "hot sheets" of new listings that are seen by agents and, in some cases, by the buying public.
Check out my article on this from the print edition of BusinessWeek.
The rules on relistings vary since they're set by the local Multiple Listing Services, of which there are over 900 in the U.S. Some are quite lax. Others are tightening up. A common reform is to keep a "cumulative days on market" odometer running even if a house is temporarily off the market, so agents who bother to pay attention can see that it's not really a new listing. But even in the MLSs with strict rules, some evasion seems to be going on. One trick is to tweak the address or property ID on a relist to fool the computer into thinking it's a new property. That trick can usually be caught, but not always right away.
This is clearly a hot-button issue for both customers and agents. Yesterday the widely read Housing Panic blog mentioned my article and very quickly got 30 comments. Last September, Glenn Roberts Jr. of Inman News blogged about it and was swamped with responses from real estate folks--some of which were of the "What's the problem?" variety.
The blogosphere has been onto the relisting trick for a long time. I can't vouch for all of the following blog mentions because I haven't checked them all out, but they're worth a click.
First, I have to thank Frank Borges LLosa, the tech-savvy owner of FranklyRealty.com in Arlington, Va. He found me a slew of examples of apparent DOM (days on market) manipulation, although I wasn't able to mention any of them in my article for lack of space. He wrote about relistings on his blog here and here.
The first I knew about this was from reading this item in the Southern Maryland Housing Bubble News blog. Here are some other delicious items from Marin County and Irvine, Calif.
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I saw it happen all the time when I was looking to buy a house in 2005 and 2006.
Posted by: Nagel at January 19, 2007 07:33 PM
There is a "new" breed of realtor coming who realizes that "tricks are for kids" or realtors who have stayed too long.
In my MLS (Consolidated MLS - primarily Fairfield Cty CT) agents are more likely to trick the system than to properly represent a home pictorially.
Too many just don't get that people are time starved. The old agents (and I don't mean in age) feel that it is easier to try to trick the system (and a good agent always knows the truth) than to provide "a complete" set of images, and not just of the interior of the house.
I would love to see you write about the changing needs (or demands) of buyers, especially the younger ones, towards information intensive housing searches. I would love to see what agents respond with to that kind of story!
The problem is that the ones we are speaking of don't read blogs (or really even know about them)...but the new breed does and cares!
Posted by: Mark Norman at January 20, 2007 08:25 AM
You are absolutely right to raise this point! In the extreme this behavior could be interpreted as fraudulent. It also generates a workload for Realtors that does not have to be there. Good agents will keep track, to the degree that they know what has been listed and pulled and re-listed.
My suggestion would be to create rules and regulation that ban a property from being listed if the total listed days by current owner are not displayed correctly. Any realtor would think twice to state false claims if the consequences for the owner were a ban from the MLS.
Posted by: Toby Munk at January 21, 2007 12:04 AM
...it turns out that this new listing is just the latest in a series of price reductions & relistings that started on 4/21/06 when it was listed for $849,900, then reduced to $835,000, then to $819,900, and so on, until it's current price of $684,900...
Posted by: John Schneider at January 22, 2007 01:08 PM
Thanks for the shout out.
I recently brought this to the attention of VAR (Va Assoc of Realtors). They recommended that I file a Realtor Ethics complaint against the 20 Realtors that I found. Problem is that the system won't allow you to send in an anonymous tip. So if I turned them all in, I would have 20 agents looking to destroy me.
Posted by: FRANK LL0SA- Broker, Northern VirginiaBlog.FranklyRealty.com at January 22, 2007 04:14 PM
A similar thing happens here in the UK. Real estate agents have all sorts of tricks up their sleeve to sell poor quality housing. We need more regulation.
Posted by: andrew stefanczyk at January 29, 2007 03:34 PM
Interesting topic! This isn't anything new, it just seems to be a topic that many Realtors are adopting now that their listings are on the market longer.
While our MLS doesn't have a rule against the practice of withdrawing listings and reinputting them to make them appear as "new" listings, our MLS system has a history feature that allows you to view the MLS history of the property linked to the property address.
So, while most Realtors think they've "pulled the wool" over other Realtors eyes, most savvy agents will do a history report for their buyers and see how long the property has truly been on the market!
Posted by: Steve at January 30, 2007 11:35 AM
I think this article was very irresponible for BW
Yea lets call it scamming the client-
I have worked in the RE industry for 11 years and as a new sales agent relisted a property -changing the id # because it was incorrect-We were fined through our mls and I had to "fight" showing it was an HONEST mistake. This article really angered me--Are you trying to mislead the public? Maybe the cause of so many foreclosures...What other articles do you publish to mislead the public, Businessweek?
Posted by: Mel at January 30, 2007 02:35 PM
It is secondary how this behaviour is called as long as it is mentioned that this behaviour exists: Buyers shouldn't trust their MLS. It could well be that your MLS has rules and regulations in place and others haven't, as it is also indicated in the article. Then make it clear to buyers that such behaviour does not happen at your MLS. I wish more articles from BW of that informative kind.
Posted by: Peter at February 8, 2007 06:32 PM