Monday, August 21, 2006

Relisting - Ethical or Deceptive

From the Star Ledger (Print edition):

Practice hides the real deal on homes for sale in Jersey
By Sam Ali

As the white-hot real estate market cools to a simmer and homes get harder to sell, some real estate agents are hiding from prospective buyers the number of days properties have been on the market and how far prices have fallen, a Star-Ledger analysis found.

These agents are canceling listings in databases known as Multiple Listing Services and creating new ones for the same homes. That resets the sales clock and masks price reductions, both important pieces of information for buyers.

The practice, legal but under fire in other states, can be helpful to sellers and their agents, who want properties to seem as attractive as possible. But critics say it is often misleading.

"It's deception," said Michael Lyon, president of Sacramento, Calif.-based Lyon Real Estate and a board member at MetroList Services, one of the largest MLS databases on the West Coast. "Anytime you reset something to make it look newer, better, you're trying to deceive someone."

The Star-Ledger, granted access to MLS data for North Jersey by agents who wanted to draw attention to relisting, found hundreds of examples in Morris, Essex and Union counties during the months of June and July.

It's hard to judge how widespread the practice of relisting is, because MLS data is closely guarded by the real estate industry. Most of the services are overseen by local Realtor associations and usually cover a large city, a county or multiple counties.

Although the public can view abbreviated home listings at Web sites such as Realtor.com, only licensed real estate agents with paid memberships to particular databases have full access to raw data.

The National Association of Realtors, the nation's largest real estate industry trade group, likens the MLS to the private stockroom at a department store. The public only gets to see what licensed agents put on the display racks.

While some brokers and agents frown on the practice, brokerage firms contacted said they didn't feel they were doing anything wrong.

"We believe that this is not a seller disclosure issue or a question of ethics," said Judy Reeves, the chief operating officer at NRT, a unit of the Realogy Corp. that owns and operates Coldwell Banker Residential Brokerage and Burgdorff ERA Realtors.

"The listing agent (the agent employed by the seller) does not represent the buyer in the sale," she said. "Buyers generally make their decisions by comparing a prospective property to the others that are currently on the market."

Similarly, a spokeswoman at RE/MAX said she did not believe anyone was being misled.

"It's a marketing strategy," said Rosali Daniels, a broker at RE/MAX Tri-County in Hamilton Square, speaking on behalf of the firm. "Most agents will watch new listings as they appear in the market place. By reintroducing a property, I am trying to ensure no one missed it the first time out. We do it to call attention to a property."

Both Reeves and Daniels said when homebuyers engage an agent to show them homes, that agent is responsible for retrieving a complete listing history for any property from the MLS database.

Lyons, who employs more than 1,000 agents at his northern California brokerage, said that doesn't always happen. Some systems don't maintain digital archives, he said, and many new agents drawn to the profession by the recent housing boom aren't properly trained.

"It's not some field on the computer screen that's right in front of you," he said. "You have to go digging for it."

The debate over what Realtors disclose to consumers and what they don't comes as Realtors are spending millions of dollars to promote their integrity. The NAR launched a public awareness campaign this year titled "Someone You Can Trust," which cites the group's strict code of ethics and the training its 1.2 million-plus members receive as major factors that distinguish Realtors from others in the business.

Critics argue that the practice of canceling and relisting properties runs afoul of the code, including a pledge to "treat all parties honestly" and provisions that prohibit Realtors from misrepresenting or concealing facts about a property.

"This is counter to what the brokerage community is striving for, which is public trust," said Jonathan Miller of Miller Samuel, a real estate appraisal firm in New York. "If this is a covert attempt to manipulate selling statistics then I don't see how it can be in the public interest that this is being done."

A spokesman for the New Jersey Real Estate Commission, the state agency that regulates the professional conduct of licensed brokers, said there is nothing on its books that addresses the practice in New Jersey.

"Mainly our regulations are aimed at preventing misrepresentation regarding the condition of the property or concealing relevant facts from a potential buyer," said spokesman Jim Gardner.

Those who oppose relisting say price reductions and length of time on the market are relevant facts that ought to be disclosed. And brokers agree these factors often influence the way buyers negotiate.

The seller of a home on the market for only one day, for instance, might not be willing to accept low offers — but the seller of a house unsold for a year might be more receptive.

"Time on the market, price — those pieces are part of the equation in terms of establishing value and motivation," said Lyon.

TARGETING OFFENDERS

Realtors in other parts of the country have been trying to clamp down on relisting.

The Northwest Multiple Listing Service, which covers part of Washington State, recently warned its 1,277 brokerages after seeing a marked increase in the practice.

And in April, the largest multiple listing service in Massachusetts, MLS-PIN, changed the way properties are tracked from listing to sale, making it impossible for agents to change the "days on the market." Marietta Nelson, owner of Marietta Realty in Cape Cod, described relisting as "one of my pet peeves," and said she hopes other MLS databases will follow suit.

"In my local board, it is common practice to mask the true days on market for listings," she said. "A lot of people do it and a lot of people don't see anything wrong with it. But whatever shortsighted gain might accrue to the individual, the wider effect is to mislead other people and corrupt an important database."

MetroList Services, which covers greater Northern California, recently created a compliance department to flag rule violators and is trying to implement other ways to stop what it calls "serial polluters."

"Good brokers work very hard for their reputations and it takes a lot of time to earn a good reputation, and a few bad apples like this can sour the whole tree," said Lyon. "In the long run, it's not good for our industry."

85 Comments:

Blogger grim said...

Sorry for any errors in the transcription. This article doesn't seem to appear on the web, so I retyped it by hand.

Enjoy.

Grim

8/20/2006 07:57:00 PM  
Anonymous Anonymous said...

Grim, thanks once again for continuing to provide such a great resource- you're truly doing a great public service here, and it's much appreciated!

Steve

8/20/2006 08:33:00 PM  
Anonymous Anonymous said...

While I agree the practice of relisting can be deceptive, the bottom line is I have eyes. If a house seems over-priced, it probably is, whether it's been on the market a long time or not. Sometimes I think I'd rather not know how much a house originally listed for because there is no way I'm going to look at something where I think a seller is just out of control in what he/she is asking.

8/20/2006 08:45:00 PM  
Anonymous Anonymous said...

More proof that brokers are scum. If any of my children told me they wanted to be a real estate broker, I would disown them immediately. Thanks G.

EMU

8/20/2006 08:53:00 PM  
Blogger Richard said...

it's deception, plain and simple. now that i know Burgdorf and Coldwell Banker's management condone the practice, i'll no longer do business with them. speak with your $ folks.

oh and i like this one.

>>Mainly our regulations are aimed at preventing misrepresentation regarding the condition of the property or concealing relevant facts from a potential buyer.

nice attempt at a sidestep. so misrepresentation is ok depending on what aspect you're talking about. slimeballs. this is why people don't trust these crooks.

8/20/2006 09:16:00 PM  
Blogger grim said...

Think the industry would be upset if I posted a list of the biggest offenders?

I've got it right here.

grim

8/20/2006 09:22:00 PM  
Anonymous Anonymous said...

Grim:

I am waiting patiently for the Offenders List.

R.L

8/20/2006 09:47:00 PM  
Anonymous Anonymous said...

It`s very real and in fact RAMPANT in OCEAN COUNTY, NEW NERSEY too. Cancellations of listings and re-listing the same house for sale several times.


Now you see it, now you don`t.

This is to hide from potential buyers !!!!!

8/20/2006 10:11:00 PM  
Anonymous Anonymous said...

Grim---

Come on...don't tempt us like that and then hold back...let's have 'em!!

AFE

8/20/2006 11:01:00 PM  
Anonymous Anonymous said...

Found following two houses being relisted. But both listing agents were honest and did not hide the re-listing fact.

1st:
East Hanover, MLS 2274817.
Listed in fall 2005, $729k
Relisted with current Realtor 2006, $699k.
Now reduced, $659k.
(I would offer $550 today)

2nd,
Wayne, MLS 2302961
Listed in spring, 700+k
Relisted with current agent, 599k.
(I would offer $450k today)

In both cases, if both sellers were a little bit realistic, properties would have been sold by now. But I am waiting for another 20% drop.

Attended several open houses and was told many times that prices were very negotiable.

8/20/2006 11:29:00 PM  
Anonymous Anonymous said...

These complaints are all from the buyer's perspective. Remember, there are two "normal people" involved in a home sale. The seller might be you some day. It isn't really anyone's business "how long" a property has been on the market any more than it is to use age as a criteria for a job. Do you think it would be right for the seller to be able to look up how long any particular buyer has been looking for a home to weed out the lookeeloos?

What's good for the goose, is good for the gander.

8/20/2006 11:45:00 PM  
Anonymous Anonymous said...

Goose and gander? I think not.

It is about MISREPRESENTATION. Posturing and negotiating as a seller is one thing, but providing intentionally misleading or false facts is another.

8/21/2006 12:05:00 AM  
Blogger grim said...

Just where do you draw the line between marketing and misrepresentation?

8/21/2006 05:25:00 AM  
Anonymous Anonymous said...

By subject the argument to the other side of the coin test.

What if days on the market and listing date were completely outlawed as descriptive items. No date IDs on pictures, no tracking back on MLS numbers, etc.

Therefore, no advantage to new listings.

Would those agents holding new listings complain that they were being stripped of an advantage, or would they say it doesn't matter?

If they balk, then DOM and price reductions are vital and must be known in a negotiation. I do it manually, and pretty much know listing history. But it takes a boatload of time and gives me an advantage over buyers who don't ask and aren't told.

Pat

8/21/2006 05:38:00 AM  
Anonymous Anonymous said...

Subjecting

8/21/2006 05:39:00 AM  
Blogger grim said...

There is time, effort, and expense associated with relisting.

The fact that relisting is occuring so frequently is testament to the fact that it works.

grim

8/21/2006 06:08:00 AM  
Anonymous Anonymous said...

Although I do find it very interesting, but sellers don't know how anxious buyers are to close, so why should it be buyers know how long they've been trying to sell?
Compare the property to the others on the market, not how ill-informed a seller was to set the initial $.

8/21/2006 06:09:00 AM  
Anonymous Anonymous said...

I am a little surprised at the hoopla over this. You don't know how long a car has been on the lot, or a dress on the rack (excpet through some general inferences). You aren't entitled to disclosure of the sellers finances, either, which may have more to do with motivation to sell than days on the market. It seems to me this is an argument for using a buyer's agent who is experienced and who knows an area well.

My house ison the market now and I only signed a 90 day listing. If we go that far I will talk to several brokers again before deciding where to relist and at what price. Should the new listing be linked to the old listing? I am not so sure.

PS--the last week, and Sunday's open house were suddenly incredibly busy after a veru dead ten days before that. The market seems to be picking up again.

--Central Jersey sell-out

8/21/2006 06:18:00 AM  
Blogger grim said...

Compare the property to the others on the market, not how ill-informed a seller was to set the initial $.

Sorry, but your argument is a red herring.

Nice try though.

The strategy a buyer should use to estimate "value" is irrelevant to this discussion.

grim

8/21/2006 06:19:00 AM  
Blogger grim said...

The hoopla is based on the fact that the industry and trade groups routinely cite these statistics in the press to create a sense of urgency in the market.

While low DOM sales were commonplace over the last few years, the fact of the matter is they are not anymore.

When the statistics don't suit your purpose, you just go ahead and alter the underlying data so that they do?

grim

8/21/2006 06:21:00 AM  
Anonymous Anonymous said...

It's nice to hear from someone on the other side of the table for a change. Now just hold on for all the nasty and stupid comments that are sure to follow. If you haven't read it already, many here condone the use of "Money Grubber" as a way to describe someone trying to market their property.

8/21/2006 06:24:00 AM  
Blogger grim said...

For many homes, number of days on market becomes a flexible figure

To remove the stigma attached to a house that won't sell and make a fresh appeal to home buyers, some real estate agents reset the clock on the number of days a property has been listed - a practice critics liken to resetting the odometer on a used car.
...
The practice of canceling and relisting a property, which shortens its days on the market, makes it difficult for analysts and economist to gauge the strength of the real estate market. "I rely on that data," Case said. "I'd prefer they not do it."

8/21/2006 06:41:00 AM  
Anonymous UnRealtor said...

Glad this has made it into print.

This house below, for example, has been re-listed 3 times by Weichert in the last few months:

MLS 2310260
http://www.realtor.com/Prop/1066418949


Shameful. All the realtor companies do it, hence none should be trusted.

They're used car dealers, but instead of seeing you as $5K profit, they see you as $20-$50K profit and will act accordingly to part you from that much money.

Since Suzanne and the "realtor code of ethics" are working against the American consumer, it's time to get laws in place to punish these deceptive, dishonest business practices.

8/21/2006 07:01:00 AM  
Blogger Richard said...

it's called stacking the deck folks. you can't arbitrarily change the inputs and quote figures if you want people to think you're saying something legitimate. while grim's lowball is an interesting approach i'd have the same problems if the NAR folks used something like that to quote their 'defacto' statistical figures as it's misleading.

if the RE industry was governed by the same rules as the SEC you can be sure this would be considered illegal. enough said

8/21/2006 07:04:00 AM  
Anonymous Anonymous said...

hey unrealtor, about the three time listing (before i get into this, let me say for the record i distrust ALL realtors, buyers reps, sellers reps .. any kind of "realtor" gains my distrust).

Ah now that I've digressed.. the question was, is it possible that the person used three different agents in a three month span to relist?
--BM

8/21/2006 07:11:00 AM  
Blogger RentinginNJ said...

Sort of off Topic…
Okay, I am probably going to kick myself later for setting off another discussion on $300 jeans, but this WSJ article is relevant to housing:

From WSJ
Consumers Curb Upscale Buying As Gasoline Prices, Housing Bite

The high price of gasoline and slowdown in housing are taking a toll on one of the most striking economic trends of recent years: Consumers' widening taste for more upscale purchases.

Amid the broader prosperity of the past decade, Americans grew far more willing to shell out for $4 cups of coffee and $400 handbags. Retailers such as Starbucks Corp., Whole Foods Market Inc. and Williams-Sonoma Inc. -- operator of Pottery Barn and its own kitchen stores -- expanded by appealing to the aspirations of middle-class shoppers.

Now, many of those retailers are feeling pinched. In recent weeks, Starbucks, Whole Foods and Williams-Sonoma -- along with others such as boat maker Brunswick Corp. and specialty-sandwich chain Panera Bread Co. -- have reported disappointing sales that sent their share prices lower. Restaurants catering to middle-income consumers are seeing a sales slump too...

For Full article:
http://tinyurl.com/gjqz4

8/21/2006 07:36:00 AM  
Anonymous Anonymous said...

Deception (De*cep"tion) (?), n.
[F. déception, L. deceptio, fr. decipere, deceptum. See Deceive.]

1. The act of deceiving or misleading. South.
2. The state of being deceived or misled. "There is one thing relating either to the action or enjoyments of man in which he is not liable to deception." South.
3. That which deceives or is intended to deceive; false representation; artifice; cheat; fraud. "There was of course room for vast deception." Motley.

Synonyms -- Deception, Deceit, Fraud, Imposition. Deception usually refers to the act, and deceit to the habit of the mind; hence we speak of a person as skilled in deception and addicted to deceit. The practice of deceit springs altogether from design, and that of the worst kind; but a deception does not always imply aim and intention. It may be undesigned or accidental. An imposition is an act of deception practiced upon some one to his annoyance or injury; a fraud implies the use of stratagem, with a view to some unlawful gain or advantage.

8/21/2006 07:43:00 AM  
Anonymous Anonymous said...

Who carez.

Just offer what you think is fair.

Period.

8/21/2006 08:15:00 AM  
Anonymous UnRealtor said...

"is it possible that the person used three different agents in a three month span to relist?"


All three listings were with Weichert, and the first two were with the same agent.

Realtors are not to be trusted.

8/21/2006 08:21:00 AM  
Anonymous Anonymous said...

Very deceptive... and all of a sudden they've taken that little statistic off of the MLS sheets that get electronically sent to you... nice huh!

8/21/2006 08:21:00 AM  
Anonymous UnRealtor said...

"Who carez [sic]. Just offer what you think is fair. Period."


So if a used car dealer is rolling back the odometer, "who cares, just offer what you think is fair"???

A fool and his money are indeed soon parted.

8/21/2006 08:22:00 AM  
Blogger grim said...

Who carez.

I care, somebody has to.

grim

8/21/2006 08:27:00 AM  
Blogger Mr. Oliver said...

That's our Grim, caring so much it hurts!

Keep up the incredible work on this site, JB.

8/21/2006 08:28:00 AM  
Anonymous Anonymous said...

Do NOT trust anything a realtor says. Ask them to put it in writing.

8/21/2006 08:32:00 AM  
Anonymous huhu said...

I care.
Thank you Grim.

8/21/2006 09:07:00 AM  
Blogger Skeptic said...

The best way to fight the relisting, doctoring ‘days on market’ info, and other deceptive technics practiced by the RE agents is not to beg them to become honest and impartial, but to provide the public with an alternative trusted source of information. Right now such source is Grim’s blog; however, Grim does his calculations by hand and cannot cover all listings. I see a need in a data-mining web-site where people would be able to get all the facts on any property in NJ, such as prior sales, the listing history, price changes, and all other details. Such web site would be a good source of up-to-date (not up-to-last-quarter) RE market statistics, too.

8/21/2006 09:29:00 AM  
Blogger Carbozo said...

I'm no lawyer, and I know the NJ Attorney General wont take action on re-listing, but I'd be curious what the outcome would be if a buyer sued a real estate firm under the NJ Consumer Fraud Act with re-listing as the deceptive commercial practice

NJSA 56:8-2 states that "the act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice."

Added bonus is, under the NJ Consumer Fraud Act, a victorious plaintiff is entitled to treble damages and costs under NJSA 56:8-19, which states "Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest. In all actions under this section, including those brought by the Attorney General, the court shall also award reasonable attorneys' fees, filing fees and reasonable costs of suit."

I'm not sure what the damages would be exactly (maybe can argue you wouldn'tve offered as high a price if you knew it had been on the market longer?) but given that the other side must pay costs it seems worth a shot for a curious and pissed off plaintiff

8/21/2006 09:34:00 AM  
Anonymous Anonymous said...

Is anyone incredibly shocked by this? Take the most dishonest profession - sales. Now take it's most dishonest denomination - real estate. Place it in the most corrupt area of the country - northern New Jersey. The result is exactly what we see here. Has anyone ever dealt with a realtor they consider trustworthy? I know I haven't. This is just another example of the dirty-handed tactics these scumbags use to spread disinformation.
Grim (fantastic job on the site, btw!)
You asked "Just where do you draw the line between marketing and misrepresentation?"
The following are examples of typical real estate "marketing" terms, which I find hilarious, and 100% acceptable:
cozy = tiny
cute = tiny
close to everything = close to 1 highway
original detail = never been updated
sun drenched = 1 south facing window. In the bathoom
modern = track lighting
cottage = shack

I can understand the need to "market" a house as such, but re-listing a property, as if it were newly on the market, is blatant deception for the sale of that individual property. It is also a skewing of the actual state of the real estate market.

-T

8/21/2006 09:35:00 AM  
Anonymous Anonymous said...

How about selling your used car by resetting the miles it has on it. Similar tactic! You are trying to market your car effectively by hiding something.
Relisting is pure BS. Lawmakers should tighten their grip on the Realtors.

8/21/2006 09:50:00 AM  
Blogger rymingrealtor said...

An article in cnn money


http://tinyurl.com/mlo88

KL

8/21/2006 09:53:00 AM  
Blogger NJGal said...

Here's some more lovely broker behavior from the NY Times:

http://tinyurl.com/zqhmw

8/21/2006 10:01:00 AM  
Anonymous Anonymous said...

By these standards if you are a house buyer and you say "I cannot afford your price" when in fact, you could get an ARM negative amortization loan, would be FRAUD because it's deception.

While I don't think the count of times you list a house can be regulated, any buyer looking up the history of a particular house will have an advantage over the seller when he sees the seller is desperate.

It's not like you can't ask for a full disclosure of the listing history and if the realtor says "that's privileged" you know they are hiding something. If they lie to you, well, then you have a case!

8/21/2006 10:03:00 AM  
Anonymous Anonymous said...

"I cannot afford your price" is not something that is material, or included in a bid.

Every cash purchaser would be forced to buy a house for more than they want to pay. So just because someone has $500k in an IRA or any other savings means they have to pay $2.5M a house?

What someone pays for a house should have nothing to do with the size of their wallet, but only with preference. However, data regarding an advertisement should be factual.

Either put in ALL the advertising, including true days on the market, or don't put in ANY advertising regarding DOM and let every home look like a new listing. Man, would I hate THAT if I was a senior salesperson with C21 [who normally gets all new listings] and suddenly had plain vanillas like everyone else.

Pat

8/21/2006 10:25:00 AM  
Blogger rymingrealtor said...

Has anybody here asked there agent for the listing history of the property? And if so what was the answer given.
Has anyone applied for a job and neglected to put in their resume a job that might possibly shine a negative light on them? They are there to sell themselves to this prospective employer right?

If listing history is asked for it should be given.
If I've met you for the first time as a buyer, first we look at properties, then, when and if you find something you like, then I do my research, so you may base your offer on all the factors,
1. Comarables in the area
2. Days on market
3. Price comfort for you
4. How much you want the home.
5. If I can find it - how much the home was purchased for and when.

People have been treating their homes as investments and not homes, and that has added to this inflated market. Now people who are buying are doing the same and may cause the market to go down, ex. purchasing at a price that would make it investment, which would deffinitly be lower that they are right now.
But.... some people are just buying a home.

KL

8/21/2006 10:26:00 AM  
Anonymous Anonymous said...

But KL, don't you think that a buyer should be told DOM ahead of time, because that might influence their selection of homes to look at?

For example, if I call a buyer's agent, and say I want to spend $350 on a property. Should the agent include only properties listed within $15k of $350, or should the agent also provide a list of properties up to $400k but on the market for greater than 180 days? Isn't that part of the role of the buyer's agent..to expand the possibilities?

Pat

8/21/2006 10:39:00 AM  
Anonymous Escape from NJ said...

It is very simple, "Information is the single most important commodity." Without access to complete information in any business deal, you give any advantage away to your adversary. If you adversary intentional hides information, you can be sure that they view the information as a weakness to their position and will make sure you do not know of the existence of said information. Compelete dissemination is the only way to even the playing ground.

P.S. As a potential buyer I have no problem going to an open house and stating to the agent how long I have been looking for a home. (2 yrs.) It sets the stage that I am not some rube who just fell off the truck and will not be "hipmoetized" by a bad paint job and knock-off Pergo.

8/21/2006 10:43:00 AM  
Anonymous Anonymous said...

I sold my home in NJ a few years ago (before this bubble market hit unfortunately. But I did ok.).

We listed with a realtor but after 3-4 months with no activity that person quit, left town. The agency assigned a 2nd realtor to us.

The 2nd realtor did not like the original pictures taken of our place, insisted that we re-do the yard, cut back hedges, etc and then had us paint the front entrance (it needed it). Finally asked that we replace the dishwasher, re-tile one of the bathrooms and put some of our excess furniture in storage.

I did almost all the work myself, cost $3k-4k.

The agent then re-listed the house, got 2 offers in a couple of months at list price (remember, this was 5 years ago).

I had some real questions about re-list, reseting the days on market but the new agent felt it was quite ethical to do so given all the add'l work we did to put the house in 1st class shape for showing.

I don't know. I went along with it but still wonder.

8/21/2006 10:44:00 AM  
Anonymous Anonymous said...

rymingrealtor:
Has anyone applied for a job and neglected to put in their resume a job that might possibly shine a negative light on them? They are there to sell themselves to this prospective employer right?


If that company ran a background check on you and found out that you had another job that you did not tell them about, what would happen?
They would immediately retract any offers and terminate all contact with you because you have been DISHONEST with them.
Why do they have services that perform background checks? To help potential employers spot deceptive candiadtes. How, as buyers, do we do our background checks? We are at the mercy of the shady realtors.
-T

8/21/2006 10:46:00 AM  
Blogger grim said...

Just to clarify exactly what relisting is, as we are discussing it here.

It is the withdrawl of a property, prior to expiration of the contract, and listing that property again (under the same agent and agency).

We're not talking about relisting due to a change in agency or agent, relisting due to an expired contract, etc.

We're talking about knowingly withdrawing a property earlier than expiration for the sole intent of either resetting the DOM and price reduction history or to have it appear on the hot-sheet as a new listing.

grim

8/21/2006 10:47:00 AM  
Blogger Richard said...

realtors can't have it both ways. if you are going to publish information on a property and use it to publish statistics then you shouldn't be able to decide what to include and what not to. the NAR tries to maintain a self-policed level of moral and ethics. whether you think this should be illegal or not, they should be addressing this issue to maintain fairness. of course they won't because they don't want fairness, they want to see their members move property and generate commission. self-interested parties won't change when the effect is negative for them.

8/21/2006 10:51:00 AM  
Blogger grim said...

The issue is here is twofold (potentially threefold?)

a) Whether this behavior is or is not misrepresentation.

b) The impact on quoted and published statistics.

It's clear that this type of behavior can and will impact statistical data. No one here has even attempted to argue against that. That leads to:

c) If a trade group quotes an average DOM figure based on this data, are they misrepresenting the state of the market to the public?

grim

8/21/2006 11:26:00 AM  
Anonymous Anonymous said...

OK, I get it. When I relist (note--AFTER the listing EXPIRES, not just withdrawn), the dislosure form is going also ask me if there is a pending divorce, relocation, ARM ajustment or job loss? Want my medical history, too? Because the buyer deserves to know just how desperate I am, and anything else is misrepresentation? Interestingly, in many small towns the agents know all that already... I grant that real estate agents can't have both ways--claiming DOM as a key metric and then manipulating it. I just think DOM is just one of many many things that keeps the real estate market from achieving anything like transparency, and in some ways is the least of it. How about the artificial inflation of selling price by having seller cover closing costs for the buyer, etc.? I think that is more distorting, because it affects all subsequent buyers who use the false comp.
--CJ Sell-out

8/21/2006 11:37:00 AM  
Blogger skep-tic said...

Realtors are digging their own hole with this type of behavior. Only a fool at this point would trust anything a realtor says. When your business depends so much on reputation, you are playing with fire by compromising ethics

8/21/2006 11:40:00 AM  
Blogger rymingrealtor said...

But KL, don't you think that a buyer should be told DOM ahead of time, because that might influence their selection of homes to look at?

Yes, and that is also a suggestion I make to buyers when they are looking. They will give me a range up to 350 lets say, and I suggest they look at homes up to 375 if they have been around a while. If they are new listings they are wasting there time, as you know sellers don't have the pulse of the market yet.
KL

8/21/2006 12:00:00 PM  
Anonymous Anonymous said...

Why would a buyer trust what a realtor says? It amazes me that people who pore over Consumer Reports before buying a coffee pot trust a sellers agent to do right by them in the biggest purchase they are ever likely to make. I predict that in ten years this market will be transformed by technolgy and antitrust litigation. I can't tell you how disgusted I was when I started hearing about the growing practice of paying the "buyers agent" a bonus commission, up to and including a BMW!

8/21/2006 12:02:00 PM  
Blogger rymingrealtor said...

If that company ran a background check on you and found out that you had another job that you did not tell them about, what would happen?
They would immediately retract any offers and terminate all contact with you because you have been DISHONEST with them.
Why do they have services that perform background checks? To help potential employers spot deceptive candiadtes. How, as buyers, do we do our background checks? We are at the mercy of the shady realtors.

The point is I am not putting the job I had at the florist 15 yrs ago - it does not pertain to what you need me to do, I was allergic to flowers and was a nasty employee, during that time.
Again I want to know the answers given when asked what the listing history is. I know what my answer is. When people realize what the consequences of the last years run up in price will truly be, they will be looking to blame everyone but themselves.

8/21/2006 12:09:00 PM  
Anonymous Anonymous said...

I was recently working with an agent who claims her area is not decreasing in prices. I gave her 3 examples of MLS listings that are already back to 2004 prices and she said this to me
"I told you she would consider negotiations. I could not in good faith advise her to sell at 2002 prices...nor would her attorney. If you're interested in low-balling, you need to work with an agent that works with foreclosures." She really thinks in the 3 years she has had this place her client will be making a 100K dollar profit.
"Jeff Otteau,who does alot of appraisals in NJ has stated that we are evening out on prices; he has never suggested that we are tanking to 50% value."
This lady Carol Sutter of Hillsborough remax is extremly greedy and is another scam artist tying to rip people off. Maybe me telling her I was gonna low ball her cleint becuase the property was not worth what she was asking was not the greatest of ideas, but I wanted to get a feel for how flexable and desperate her client is.

My idea for the declining market so both parties, buyers and sellers to win in the end, but more for the buyer since it is our market:

Most people want way more than there house is worth. Lets say you do reaseach and without the bubble you calculate a place listed at 300 should be valued more near 160K.
Instead of lowballing off the 300K make an offer on the property as a rent to own option. If they want all there money they should not get it all at once now since its a buyers market.
So for 300,000/360 = 833.33 than add taxes and if its a townhouse add association fee, do not however pay interest. Its a buyers market they are most likley already going to be making a big profit, don't let people swindle you out of more, like some that say 30% will go toward the purchase price, is a buyers market we set the standards not them. If they are that desperate and have had it on the market for a long time they may be willing to take it. If you were going to get a mortage on what the property is actaully worth 160,000 at 6.25% your are going to end up paying around 364,000. So in the long run with rent to own you save money in the long run andboth parties win. This is more if you plan on staying somewhere for a while.

8/21/2006 12:16:00 PM  
Blogger grim said...

Fingers will be pointed, there will will be lawsuits.

Take a look at this piece:

Real Estate Buyers in New Jersey Retain Right to be Informed of Off-Site Conditions Pursuant to Consumer Fraud Act

In Nobrega v. Edison Glen, 327 N.J. Super. 414 (App.Div. 2000), 2000 WL 46064, the plaintiffs purchased units in a condominium development in Edison, New Jersey, which is within two miles of two Superfund sites. Eileen Nobrega, plaintiff, unit owner and President of the Condominium association asserted that during 1993 or 1994, she learned that other unit owners encountered difficulty in the resale of their condos, including: (1) a 40% depreciation of the value of their units; and (2) "a virtual halt" of condo resales. In addition, the condo developers removed unsold condos from the market because they would not sell and instead were leasing them to transient tenants.

Plaintiff's 1997 complaint against the developer set forth a cause of action under the New Jersey Consumer Fraud Act, claiming that "the defendants employed unconscionable commercial practices and/or fraud or other unlawful acts in connection with the sale and/or advertising of the units at the Condominium in violation" of the Act. The alleged violation was the failure to disclose the presence of the nearby Superfund sites


The NJ real estate market was in shambles in 1993 and 1994. Those years represented major nominal price declines from peak prices set in the late 80's.

These two factors:

(1) a 40% depreciation of the value of their units; and (2) "a virtual halt" of condo resales.

Were more likely due to the crashing real estate market then the fact that there were superfund sites located nearby.

grim

8/21/2006 12:19:00 PM  
Anonymous UnRealtor said...

Add in that this deceptive tactic also impacts NAR reporting data.

If a house sits for six months, had 4 price drops, and sold on the last relisting, the NAR would report:

"Sold in 2 days at 98% of asking price!"

Which is a LIE.

So the public is getting screwed in more ways than one by this dishonest practice.

8/21/2006 12:19:00 PM  
Anonymous Anonymous said...

DO NOT TRUST REALTORS.

ASK THEM TO PUT IT IN WRITING WHEN THEY MAKE SOME BS COMMENT.

8/21/2006 12:38:00 PM  
Anonymous twist said...

The relist issue is not the only thing that distorts the numbers. "Days on Market" is only of the homes that have sold. It does not take into account the homes that are taken off because a seller has given up, turned it into a rental. It does not allow for homes that continue to languish unsold on the market.

While it is true the public has no idea how long a car languishes on an auto lot- the government, and the public, do not use "car languishing" numbers to evaluate the car market.

Every month the NAR announces these numbers, and this is what the American public uses as a gauge.

This practice does not benefit sellers. When sellers hear that homes are selling in 60 days, for 98% of asking price- they are liable to keep their price too high- thinking that if they are patient, that buyer is coming along.

Waiting too long is causing many sellers to deplete their resources, making two mortgages etc.

This is a practice that benefits the realtors association- making them appear more efficient than they are. It is not a practice that benefits buyers or sellers in the housing market.

8/21/2006 12:59:00 PM  
Anonymous dreamtheaterr said...

OT:

To anyone buying a used car - see the CarFax report. You will see the date when the car was traded in to the dealer. Calculate how long the car is on the dealer's lot to negotiate and drive home a good bargain!

For new cars, remember Econ 101 class.....all new cars are a commodity sitting in different dealerships. Make them bid and for your business and buy from the dealer who quotes you the lowest OTD price.

8/21/2006 01:22:00 PM  
Blogger legacycode said...

c) If a trade group quotes an average DOM figure based on this data, are they misrepresenting the state of the market to the public?
grim

This sort fo stuff needs to be reported to your legislators. Realtor laws are local and need to be nationalized to limit fraud. Securities laws are national in scope and better enforced. Write to your Congressmen.

8/21/2006 01:26:00 PM  
Anonymous Anonymous said...

Mr. Roach is going to kill me, but here it is again:

proach@ftc.gov is the person you want.

He actually answered my e-mail about sign manipulation.

http://www.ftc.gov
/bc/realestate
/index.htm


Pat

8/21/2006 01:37:00 PM  
Blogger Thorium232 said...

But... Real Estate Agents ARE ethical, they say so in their commercials!

8/21/2006 01:45:00 PM  
Blogger legacycode said...

"http://www.ftc.gov
/bc/realestate
/index.htm" Pat

FTC site on RE shows NO court cases on competiton for 13 yrs - the one in 2006 was preceeded by one in 1993. I say it's the Congress that needs to get involved.

8/21/2006 02:22:00 PM  
Anonymous Anonymous said...

if you depend on the gov. to help
you in your housing search , it's
a waste of time.

take Grims advice and do your
own research, its like buying
a stock, what are you going to do
take your brokers word?

8/21/2006 02:22:00 PM  
Blogger Skeptic said...

To rymingrealtor:

KL, do realtors have access to the mortgage records? If yes, can you give the information on how much equity the seller has in his home upon the request from your client (the buyer)? Also, I know that you are not supposed to give the sex offender info on the neighborhood to the buyers as per Megan Law. However, can you direct the buyer to the State Police web page where such info is listed?

8/21/2006 02:38:00 PM  
Anonymous Anonymous said...

Some Lenders Cut Riskier Mortgages
Monday August 21, 3:27 pm ET
By Lingling Wei, Dow Jones Newswires
Some Lenders Cut Riskier Mortgages Due to Wall Street Pressure


NEW YORK (AP) -- Some mortgage lenders are feeling the heat from Wall Street to tighten their lending standards and cut their exposure to riskier loans.
The force at work is the increasing demand from investment banks for lenders to buy back the loans due to borrowers' failure to make their first few payments on those loans. Such "early payment defaults" so far have largely been limited to nonprime mortgages made to borrowers who pay higher rates than those qualifying for standard loans due to their weak credit or inadequate documentation.

ADVERTISEMENT


Buybacks of defaulted loans demanded by whole-loan acquirers, particularly Wall Street firms, have in recent quarters led some lenders to incur losses and set aside more money in their reserve funds for potential loan repurchases in the future. An increase in those reserves then cut into their profits. To shield themselves from future buybacks, some lenders including NetBank Inc. and Fremont General Corp. have backed away from offering loans that have seen greater delinquencies, such as those featuring higher loan amount relative to the property value and lower credit scores

8/21/2006 02:41:00 PM  
Anonymous Anonymous said...

Bad News Fools....Wall Street cutting access to Dummy loans.

Hehhehe

The jet fuel is no longe available morons.

Boooooooyaaaaaa

Bob

8/21/2006 02:42:00 PM  
Anonymous Anonymous said...

“The National Association of Realtors is expected to report existing-home sales Wednesday morning, and economists will be watching median prices to see if they fall from the previous year. That would be the first year-over-year decline in over a decade and would damage buyer sentiment, according to Banc of America Securities analyst Daniel Oppenheim"

The Secrets out already dannyboy.

8/21/2006 02:49:00 PM  
Anonymous Anonymous said...

Legacycode ... may not be the number of cases that changes laws in an industry, so much as the importance of the analysis, reports and advice given:

http://www.ftc.gov/opa/2006/07/recompetition.htm

FTC Testifies on Competition in the Real Estate Brokerage Industry

The Federal Trade Commission today told the Subcommittee on Housing and Community ...
... also provides analysis of the likely competitive effects of legislative proposals.

Convince the messenger?

Pat

8/21/2006 03:30:00 PM  
Blogger chicagofinance said...

yech

3-Month 5.08
2-Year 4.86
10-Year 4.82

8/21/2006 03:37:00 PM  
Blogger rymingrealtor said...

KL, do realtors have access to the mortgage records? If yes, can you give the information on how much equity the seller has in his home upon the request from your client (the buyer)? Also, I know that you are not supposed to give the sex offender info on the neighborhood to the buyers as per Megan Law. However, can you direct the buyer to the State Police web page where such info is listed?

Skeptic,

Sometimes the mortgage amount recorded at the time of purchase is listed on the tax record, no always and I don't think this would include open home equity lines. Also does it matter? There are certain circumstances you will never know. If there is no loan on the property does that always mean you will get that seller to sell to you for less than they think there house is worth, because they don't need the money? Or the person who is mortgaged up to the eyeballs is going to give in to a short sale or let the bank take it? Id rather make the bank take it! To hell with my credit. Some people can't make big decisions no matter how much info they are given. Many factors went into this mania, the least of which are realtors, the most of which is just plain human nature.
I don't think there were any tulip brokers.

As far as the megans law, the website is in/on the contract you sign and get a copy of.

KL

8/21/2006 04:16:00 PM  
Anonymous Anonymous said...

Skeptic

I work in datawarehousing and data mining. I have done a lot of work in trending and analysis etc. If Grim and you guys wanna start this, i would be happy to kick start the effort (I have a Sun server running oracle at home). However, I will not be able to provide real-time reporting due to bandwidth issues with my DSL connection.

Grim, you know my email -- i had mailed you about the PA listings. If theres anything I can do to support, send it my way to my bm account (gmail)

at the end of the day, we wont be able to do this countrywide, but, we can certainly come up with a standard model that other folks across the country can use and follow.
--BM

8/21/2006 06:17:00 PM  
Anonymous Anonymous said...

It's nice to read these discussions about the obnoxious housing market. It is a comfort to read that I'm not the only one stating these very same comments.

A word to the buyers....
This is what your last owner said to him/herself when they got your check.

HAHA What a sucker! We'll take this extra 230,000 profit and buy a nice place in South Carolina.
I told you honey I bought this crap house with no money down and all we did is live in it for 5 years. We bought it in 1999 for 155,000. I'm a real estate genius! We are in credit card dept, but this solves everything Yeepy! I'm leaving NJ with a hefty profit and leaving the new owner in a shabby over developed urbanized town with high taxes. I'm so glad the media, real estate agents, mortgage companies perpetuated this insanity.

HAHAHAHAHAHAHAH!

Tell me, do you want to make this scxmbag retire in comfort with your money? I'm sure this story is not uncommon.


A message to the sellers for quick profit...
Have fun paying two mortgages! and QUARTERLY TAX!
Party is over Profiteers!
Lower your price significantly if you want to sell, and stop watching "Sell this house" on TV Those cheap gimmics will not work!
(at least with me)
I have more respect for someone who bought a house in 1978 for 52,000 and sold it for 175,000 in 1999. Not the joke thats going on today!

Real estate should have NORMAL appreciation which should only depend on real equity and true income. It funny, in the past 4 years I don't remember people doubling their salary.

8/21/2006 09:23:00 PM  
Blogger Jiggles McBlogger said...

This weekend I saw signs advertising "New Price". I guess "Price Reduced" reeks of desperation?

8/21/2006 09:28:00 PM  
Blogger Skeptic said...

BM and Grim,

The RE data-mining project is well under way :) I estimate that the beta release will be ready within a couple of months. If you are seriously interested, e-mail me using the link on my profile.

8/21/2006 09:57:00 PM  
Anonymous UnRealtor said...

Here's a serial re-lister, Judi DeBiasse from ReMax:

34 Montrose Ave
Summit, NJ

Mar 03, 2006 - $619,000 (MLS 2253314)

Apr 15, 2006 - $639,000

Jun 30, 2006 - $639,900 (MLS 2295194)

Aug 14, 2006 - $628,900 (MLS 2310015)

http://www.realtor.com/Prop/1066314289


According to the realtor "code of ethics" this house has been on the market only 8 days.

According to reality, it's been on the market 172 days.


Only a REALTOR® is bound to a strict Code of Ethics, which is required training. The public is being educated through an extensive national campaign on what a REALTOR® is, through national primetime TV ads, radio ads, and print ads in newspapers and magazines across the country.

http://nwrealtor.com/displaycommon.cfm?an=1



The public is hardly being educated.

8/21/2006 10:38:00 PM  
Anonymous Anonymous said...

Another aspect of this that I haven't seen mentioned, is that DOM appear on the appraisal and can affect lendability. ie long DOM may equal undesireable property/price.

PbW

8/21/2006 11:49:00 PM  
Blogger rymingrealtor said...

Here's a serial re-lister, Judi DeBiasse from ReMax:

34 Montrose Ave
Summit, NJ


Un Realtor:

This was purchased in feb 06 for $440,000 .....

KL

8/22/2006 07:51:00 AM  
Anonymous Anonymous said...

skeptic, sent you an email
--BM

8/22/2006 08:05:00 AM  
Blogger delilahboyd said...

The house next door has been on the market since Feb. 15th: 3 real estate companies and Help-U-Sell listing, but no sale.

Last week, the Long & Foster ad claimed: NEW LISTING!

Also, Long & Foster's new website has axed its "Most recent on the market" search feature.

What a crock in DC!

DC Housing Bubble Blues

8/22/2006 08:16:00 AM  
Anonymous UnRealtor said...

"This was purchased in feb 06 for $440,000"


Thanks KL. That's one greedy grubbing seller -- that house doesn't have anywhere near $200K in improvements since February.

Looks like a coat of paint. Who needs a $200K paintjob?

8/22/2006 08:58:00 AM  
Anonymous Anonymous said...

My own experience

I work with an agent from Weichert. When he sends e-mails me a customer report for a listing, the DOM is always blank and it only shows the current price of the property. In other words it does not show any price adjustment since the original listing. I complained to my agent and asked for the missing information, he told me that he can't e-mail me the full listing with the information requested as the MLS system does not allow him TO E-MAIL THE CUSTOMER REPORT WITH THAT INFORMATION. I am not sure if this is a Weichert thing or Realtors thing in general.

My agent is an old time realtor and very honest /open with me, he would print the full report with all the data and give it to me or he will give that information over the phone on any property I may ask info about.

Any Comment

Cliffy

8/29/2006 09:03:00 PM  

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