Re-listing properties, misleading DOM and list prices

[Smokey Bear]

This in my current report. Yeah, I know, you don't like all caps. Deal.

I'm seeing so many relistings with price reductions in order to dork the statistics it's pathethic. The actual difference works out to avg. 90 days instead of 30, for listings. Closed sales would be longer.

THE MEDIAN HOME PRICE IN THE SUBJECT NEIGHBORHOOD IS CURRENTLY 532, 500 FOR THE PAST NINETY DAYS, BUT IN THE PAST 30 DAYS THAT HAS DROPPED BY 12% TO $470,000. THIS TREND HAS BEEN SEEN IN OTHER PARTS OF THE BAY AREA AS WELL. IN ADDITION, STATISTICAL ANALYSES CONDUCTED USING PARAGON, THE LOCAL MLS, SHOWS AVERAGE MARKETING TIME TO BE 30-40 DAYS. HOWEVER, A MORE DETAILED MANUAL ANALYSIS SHOWS THAT 75% OF THE ACTIVE LISTINGS IN THIS NEIGHBORHOOD HAVE BEEN RELISTED, SOME MANY TIMES, FOR AN AVERAGE OF 90 DAYS, WITH MANY ON THE MARKET OVER 150 DAYS. PRICE REDUCTIONS HAVE ALSO BEEN THE NORM FOR THOSE RELISTINGS.
THE AVERAGE NUMER OF PROPERTIES SOLD IN EACH QUARTER THIS YEAR IS 35. THERE ARE CURRENTLY 162 PROPERTIES LISTED FOR SALE, WOULD TAKE 4.5 MONTHS TO SELL PROVIDING THERE WERE NO NEW ACTIVE LISTINGS. ACTUAL ABSORPTION WOULD BE LONGER.

THE EXTENDED MARKETING TIMES SHOWN BY RELISTINGS, THE PRICE REDUCTIONS AND THE OVERSUPPLY OF ACTIVE LISTINGS, COMBINED WITH THE 12% REDUCTION IN MEDIAN HOME PRICES IN THE PAST 30 DAYS SHOWS A DECLINING MARKET.

 

[Bob Ipock]

Which part of "Realtor® ethics" does this fall under?

How about intentionaly misleading all who rely and use the data?

 

[ttaM kooC]

I think more and more MLS systems are adding a Cumulative Days on Market calculation to address this, and I think they are under pressure from NAR or CAR. The local MLS systems that I use include CDOM. When one of them announced the addition of CDOM, they ended the announcement with this statement:

Please be aware that “churning” is considered to be a deceptive business practice and a breach of the Realtor® Code of Ethics. Churning is the practice by which an agent/brokerage re-enters a listing in the MLS for the purpose of making it appear to be a “new” listing when in fact, it is not. Examples of churning include canceling and re-listing a property prior to its contractually-specified expiration date in order to give it a fresh appearance; taking multiple short listings on a property; shortening the listing period to intentionally expire the listing early and then re-list it so it appears new; and so on. Policing of churning will be done by the associations, who will review new listings for compliance to MLS Rules and Regulations and when discrepancies are reported by other agents. If churning or other unethical behavior is suspected, an agent/broker will be required to provide a copy/copies of applicable listing agreement(s) to the Association for validation. Agents will not be allowed to engage in activities which are purposefully intended to deceive the public nor their fellow Subscribers.

 

[Em Tee]

I use the same MLS Cynthia does and I wish they'd stop this practice. I have an appraisal for a purchase I'm doing right now where the listing shows 31 DOM, but it's been listed 5 times for an actual DOM of 161 days!!! That really pisses me off when agents do that.

 

[Doug Meyer]

Realtors using deceptive practices like churning, no I cannot believe that at all!! LMAO

 

[murray stroupe]

RE; Churn 'em & burn 'em, believe it or not

Realtors using deceptive practices like churning, no I cannot believe that at all!! LMAO

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And a related note ,average marketing time is 3- 6 months in our West TN area, for land .And saw one in OCT , it was more & appraiser noted it was 200 days

 

[Craig in Oregon]

By any chance, Cynthia,

Does the local MLS have a "H" button at the far right (or somewhere on the same line as the property address) for history?

That's history of listings, etc of the address

Ours also has buttons for map and tax info

Just a thought to help find those deliberately scrambled dates

 

[Artemis Fowl]

I use the same MLS Cynthia does and I wish they'd stop this practice. I have an appraisal for a purchase I'm doing right now where the listing shows 31 DOM, but it's been listed 5 times for an actual DOM of 161 days!!! That really pisses me off when agents do that.

Was it relisted at the same price or are there reductions? If relisted at same price then it is deceptive.

If relisted with reductions then, to me, it reflects the realtor's inability to accurately estimate market value. How relevant is DOM when the list price is 30% higher than MV? How much more relevant is DOM at eventual sale price?

How do others handle and report this issue?

 

[Mister Ed]

Was it relisted at the same price or are there reductions? If relisted at same price then it is deceptive.

If relisted with reductions then, to me, it reflects the realtor's inability to accurately estimate market value. How relevant is DOM when the list price is 30% higher than MV? How much more relevant is DOM at eventual sale price?

How do others handle and report this issue?

John,

I just did a review of a house that was listed (continually) for over two years (four different listings, all expired, seller is RE agent).

Started at $599,000. Through various listings, it went up to $749,900 over the course of 18 months and then was dropped back to a (final) listing of $650,000 but was withdrawn because it was being refinanced by the seller. The appraised value? $840,000.

The report did not mention but one listing and used three properties that were one block off the ocean and one in a golf/yacht club gated community. The subject was an overimprovement (recently built) in an older neighborhood that is two blocks east of the Intracoastal waterway and is about 0.75 mile (by road) to the ocean.

The total days on market reported are all of those listings' DOM combined. Why? because that is how long it was on the market. It also tells me that the appraiser (a trainee) doing the appraisal was clueless. If the house would not sell at $599,000 in a pretty hot local market, what makes him think it would sell for $840,000 in a slowing market? Was that the "needed value to make the deal work?" That one really had ALL KINDS of problems. That report was really pretty sad from my point of view.

The relevance of the DOM (if the history is explained) does tell the story to the UW about the subject. It also can tell the story (in my case) of what the market will and will not bear for a price on a particular house.

Listings (at least in my MLS system) can be changed to reflect decreases or increases in listing price. A house I just appraised for a purchase had over 200 DOM and was reduced four times from (originally) $499,900 to $375,000 and contracted at $355,000. My opinion of value was around $365,000 but there were almost 20 similar sized sales (recent within 4 months) ranging from $320,000 to over $750,000. It tells me that the listing agent did a poor job of advising her customers OR the seller had dillusions of grandeur that only a long marketing time could bring him back to reality.

 

[Artemis Fowl]

Listing history of a "subject" property is always relevant and should be reported. Especially in your case Ed.

Specific to the questions I posted is the issue of comparable data listing history. How much weight do you give to a 200 DOM when list price is totally out of wack with eventual relisted 31 DOM sales price? Is it really accurate to state that it sold after 231 DOM? I guess that's technically true but is it misleading? Does it accurately reflect avg DOM for a n'hood? Do you report marketing time based on 31 DOM or 231 DOM?

Reporting listing history of a comparable sale solves the problem (obviously) but do you grid 31 DOM or 231 DOM?

It tells me that the listing agent did a poor job of advising her customers OR the seller had dillusions of grandeur that only a long marketing time could bring him back to reality.