MLS Data Fudged By Realtors. Watch out!
If you are putting in an offer to buy a house, and you aren’t using a FranklyRealty.com agent (God knows why you wouldn’t but lets just say you are stuck with your agent), make sure you have your agent look out for MLS fudging.
There are 2 levels of MLS fudging. One is a NVAR (Local Realtor association) violation and the other is borderline ethical. And there are 2 reasons agents fudge the MLS.
So if a house drops from $600k to $550k after 100 days, and the plan is to drop again, but to $500k, the “borderline fudger” will do a normal delist (expire or withdraw) and relist.
80% of Realtors will see the DOMP at 101 and look back at the old listing to get more information before making an offer. I found one agent did this 17 times! This fudge is harder to do. After delisting the property, the agent goes back to relist. The system by default will recognize the property by the address and ask you if you wish to pre-fill the Tax-ID and some other data from the tax records. And agent doing illegal fudging has to go out of their way to press NO and override the system by entering gibberish into a tax ID of 000000 and then another 40 minutes reentering data. (The MRIS claim that they have a system to protect against this, however I have seen it over a few dozen times.)
Maybe only 25% of Realtors will find this fudging. They know that when submitting an offer they should search for expires and withdrawn listings for that address (and variations like St vs Street and N vs North). What a shame that we can’t trust our fellow Realtors to be honest. In the graph above, that is not the default of what a Realtor sees after a search. I had to create a special search to put it in that form. It is much harder to find. Also note that in this case the first 4 light fudgings were from one agent and then a new agent took it on and did the Tax ID=0000 to reset everything. This is NOT as bad (still illegal) as one agent relisting multiple times using the 0000 trick. NEW: Part 2: - Written by Frank Borges LL0SA- Broker/Owner FranklyRealty.com Videos at YouTube.FranklyRealty.com
This is what happens when a listing agent wants to re-list a property they are already listing for sale. Maybe the house has sat for a few months or there is a big price change. Instead of a 2 minute change, they will withdraw one listing and spend 30-45 minutes reentering all the data.
This low-fat fudge will:
a) The new DOMM will be 1 (but the DOMP will be remain “101″)
Illegal MLS Fudging. 20% Chance You’ll See One
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Keywords: Housing bubble? Arlington, Alexandria, mls, homes, Real estate, Virginia, DC Realty, Realtor
- 4
- January
Thanks to Business Week for doing a story on MLS fudging.
Peter Coy wrote on his blog/website:
First, I have to thank Frank Borges LL0SA, 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.
I’m glad I could help you.
Watch out for this one too. Right before settlement one agent I know of goes back and changes the Sales Price to what will actually be the settled price or close to it. Then when she is on listing calls, she shows clients a list of her sales that make her look like she has a high success rate getting the sales price. Without a history of the property it can be vary deceptive.
It’s sad to consider that this type of activity is “justified” by the presumption that the real estate agent is “freshening up” the listing & presumably “helping the seller.” Rather, it’s deceptive & ultimately all of us are negatively affected because the data on MLS systems is inaccurate & gives a false perspective on how long it takes for homes to sell
Another thing to watch out for is falsification of the number of bedrooms. For certain homes (e.g., those with septic fields instead of sewers), especially newer ones, an agent will list the number of rooms that might (legally or illegally) be used as bedrooms rather than the number of those that are proper bedrooms or the number of bedrooms for which the property “percs”. A number of condos are also up-roomed, with 1BR+dens being listed as 2BRs, studios that have had a thin interior wall added listed as 1BRs, etc. The result is twofold: the buyer of the dwelling may end up overpaying and, after the sale, properly listed comps can look comparatively overpriced when, in reality, they are not.
What is the NAR penalty for such behavior? They keep advertising a “Realtor Code of Ethics” yet this practice is rampant among realtors.
I live in another state and keep track of realtor MLS relistings on my own, which is very time consuming. The average consumer who has not invested such time is a sitting duck.
The NAR penalty for such unethical realtor activity should be a $1,000 fine for the 1st occurrence, and loss of all NAR realtor credentials for a 2nd occurrence (i.e., “you’re fired”).
There should also be a $500 reward paid to any realtor who anonymously reports such bogus relistings.
As long as the NAR continues to ignore the problem, it will exist, and it ill reflect poorly on both the NAR and realtors in general.
Hello Anonymous,
The fine for illegal (full fat) fudging was just $50 until BusinessWeek got a wind of this post. It has since gone up to $1,000.
I love the idea of an incentive or bonus to report these errors.
I have reported 130 violations (of all sorts) to MRIS, so I could get rich from that.
Also I have suggested to MRIS that they NOT reset the “Original Price” when a property is relisted. That would reduce the motivation for Fat Free (legal) fudging.