There has been much discussion lately regarding the nefarious practice of agents cancelling real estate listings and relisting them at the same price the same day to create more attractive market times. That practice is forbidden by most MLS systems, including the San Diego MLS (Sandicor), but I am beginning to wonder if there might be a way to put this crime to good use.
What if listings were allowed to be cancelled and relisted if the asking price were reduced by a substantial and minimum pre-set percentage? For example, lets say a listing had been on the market a minimun of 21 days and the seller decides to become very aggressive and reduces the price by a minimum of 5 percent or more. How might this seller be œrewarded?
In this case, we may have changed the entire marketability and nature of the listing and perhaps it deserves the attention of a new listing. Properties that have been substantially reduced deserve more market attention that those that are overpriced and languish unchanged. I believe proactive home sellers and agents deserve the additional market attention.
The listing history would remain unchanged under this scenario, but now we would be able to show our buyers when and by how much the listing was reduced. With our public San Diego MLS, the reduction history is lost. Many real estate agents feel this is important information for clients when determining pricing and offering strategies.
It would also be a good additional tool for the sellers agent to use when trying to negotiate a price reduction. I know our San Diego sellers anguish over market time and wish there were some way to re-present themselves to the MLS and online communities when they have aggressively reduced their pricing in response to market conditions.
This might be a workable solution.
Thanks for putting some light on this not so wanted to be talked about subject – at least in SE Michigan – As appraisers we search for property under the property tax id or parcel number because very few of the Days On Market are actual per that listing. Needless to say it makes our job a little harder and puts us at some risk, so we now have default comments to cover us with this problem. What I wonder is if muti listings actually hurt the listing in the long run because of market exposure. Any real estate sales broker or agent in the market will know if it is common in their MLS to relist properties to show a lower DOM.
Apella: I would like to see transparency regarding the MLS market time and price reduction history. Currently, the San Diego MLS shows only the original list price (OLP), the current price and days on market (DOM). As a result, motivated and market-responsive sellers are being penalized. I would like to see how long a listing has been on the market at its current price. That should be reflected in the Days on Market stat.
Roberta,
Wow. I didn’t know that your MLS system did not show the history. Here in the Sacramento, Placer, El Dorado and Yolo areas anytime you bring up an address it will show you how many different Realtors have listed the house and there is a “history” link on each listing that shows the dates of each time the listing was reduced and how many DOM the house was listed at each price. Perhaps, your MLS should be contacted since this is vital information for those of us that actual list and sell.
Roberta, the days on market stat is useless as it the list price to sales price ratio. I have specifically asked Sandicor and NCSDCAR to take action on this because we need reliable stats to work with. Furthermore, the days on market and list to sales price ratios are used for MLS statistics, and the HOMEDEX report. As marketing time increases and values decrease, the data becomes so warped as to not be usable. Basically, CMAs are worthless because they understate marketing times by up to 225% depending on the area. The original list price to final sales price when prior list periods are factored in are as much as 5-8% off. That is substantial for list to sales price ratio.
I never believe it is appropriate to refresh the listing period. I do, however, believe the price change history should be available to MLS agents and subscribers. I am seriously beginning to wonder if the failure to enforce agents who inappropriate refresh listings and the MLS’s failure to properly track and report the data is intentional.
But why would the MLS want to understate market times and list price to sales prices ratios?
Perhaps Sandicor and NSDCAR could adjust reporting procedures to show actual market time for a property’s most recent price reduction. So often, clients wonder how long ago the reduction took place–and so do I.
By openly revealing this listing price history information, aggressive home sellers would be rewarded–and buyers and their agents would have a better feel for an offer strategy.
And as for accurate real estate statistics, we gotta remember Disraeli’s three kinds of lies: Lies, damned lies and…statistics.
Case and point.