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.
Real estate is largely self-regulated. In most of the U.S., agents are responsible for entering information about the homes they're selling into a database that is maintained by the local Multiple Listing Service. Each of the 900-plus MLSs sets its own rules. The trick of making old listings appear new is against the rules of Simone's MLS, although he said later that he didn't know it at the time.
What's perhaps more surprising is that in some regions, the local MLS does nothing to prohibit relisting a house in a way that makes it appear new on the market. In Atlanta, for example, First Multiple Listing Service Inc. charges sellers' agents just $25 to withdraw a listing. When they then relist the home, it shows up on "hot sheets" of homes that are fresh on the market. A buyer's agent who investigates can see that the house was for sale before, but not for how long. First MLS President Cantey Davis acknowledges that the system could give buyers a wrong impression of how long a home has been for sale but says he has received a "minuscule" number of complaints about it.KNOWING WHAT TO LOOK FORWhen many homes in an area are re-listed as new, it skews the "average days on market" statistic, making the market look healthier than it really is. For sellers, refreshing a listing can also disguise the fact that the previous listing was at a higher price. Buyers often regard a price cut as a sign of weakness.
Whether it's within the local rules or not, the practice of relisting houses to give them a new debut is a symptom of an imbalance in market knowledge. Buyers can sometimes spot manipulation of the databases, but you have to know what to look for, and many buyers' agents don't.
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. (Simone's boss, Wayne Wivel, president of Re/Max 100 in Annapolis, Md., said in December he had no knowledge of any manipulation.)
But brokers often resist change. Northwest Multiple Listing Service in Kirkland, Wash., discloses the history of listings, but relists still show up on the hot sheets. CEO Jack Johnson says, "We've had difficulty convincing the board of directors" to eliminate what he calls "cancel/relist." As long as the buying public knows less about properties than the agents who list them, caveat emptor. By Peter Coy