San Diego Housing Bubble News and Analysis

This practice has been banned for years.
While there are ways to fraudulently defeat the rules (just like any rules) its not exactly easy. Also, reporting violations anonymously is easy for agents to do (I have done it many times). Also, the whole "stale fish" argument is not a good one. Long market times (in my experience) exist because it is a short sale (requiring a lengthy bank approval) or because its listed too damn high.

Correct. Changing a price by itself does not reset the MT (market time) or AMT (active market time).
If an agent shows a new listing he has to have a listing agreement (as well as prior cancellation or expiration) in writing to back it up.

Or to make the claim that their listings never sit for more than 30 days (or some similar claim).

Yup.

Often they can do that without encouragement.

Nope.

If it were allowed (which it isn't) it would considered fair game. But since its not, your point is fair.

Its 30 days in our jurisdiction.
If you cancel a listing and re-list it with the same agent in the same office within 30 days of the cancellation, you need special variance permission (at least last I checked). The variance desk would notice if this happened a lot.

Listing history is not generally the most relevant aspect when establishing whether or not a property is a good deal. If a deal is a good one, the listing history of a given property may never come up. EG: I closed on that had been on the market for like a year. The seller wanted unrealistic numbers for it. The current listing (the one active when we went into escrow) was with a better agent and at a lower price. The listing history came up but it was not a major component. My buyers did not consider it relevant that it was for sale at a higher price a year ago.

Relisting properties doesn't bother me. It's just kind of pathetic.
Most people looking to buy a house can see immediately if a house is relisted because they've been looking at listings for a while-- so it doesn't fool anyone.
Another really obvious tactic is when you see people take the house off the market for a while and then relist it a much higher price so that they can then suddenly drop it steeply to the original listing price.
These are pretty desperate times. I don't understand why realtors don't advise their clients to drop their prices to below the comps in the neighborhood to give them a chance to sell. Maybe they do and their clients are just too stubborn to listen. Better to dump the house now and make a little bit of money or to cut losses then to have it stuck on the market forever.

If it's banned they are not enforcing since I see relisted properties all the time.

For example here's a property in RSF from a few days ago:

Listing cancelled:
http://www.sdlookup.com/MLS-081038156-17...

Re-listed same day:
http://www.sdlookup.com/MLS-080084396-17...

Amen.

You have no idea how many times I have had that very conversation.

You also would not believe how many times being that blunt cost me a listing.

These days I try to be a bit more nuanced in how I describe the situation.

I can't speak to the "every day" thing but the example you gave is of one that *expired* (very different from canceling) and was subsequently re-listed. It happens because a listing agreement legally has to include an expiration date. Sometimes a seller will modify the listing agreement (to extend the time frame) and sometimes not. When a listing contract expires and a new listing is inked, those are legally required to be indicated as 2 independent listings. This would also apply if the seller hired a different agent. The change in parties to the contract means a new contract and thus a new listing.

In the case of this specific property, there was also a duplicate canceled listing for the same days as the current one. That is likely due to accidental user entry (Realtors accidentally hitting "submit" twice), or due to Sandicor's servers erring.

Its not as though she is canceling and re-listing every 60 or 90 days to make the property appear to have activity. The property expired once after 3.5 months and again after another 7 months.

However, it would make more sense to just re-list the property at a reasonable price. Over the course of 10 months(and 3 listings), this property has come down in price only 4 percent.

urbanrealtor - Thanks for the insight to what happened. On SDLookup.com it shows the listing as "Removed from Market" (as opposed to "Expired" which would more accurate) and then as a "New Listing" (as opposed to "Renewed Listing").

In my opinion the MLS should not reset the DOM on listings that expire and are subsequently relisted. It would provide a more accurate picture to buyers and a greater sense of transparency.

You may have a point. I think that its an issue of legality rather than policy though. Its possible I am wrong but that would be my suspicion.

I don't think anyone here is fooled by relistings.

But I can imagine a married couple with a baby one the way, desperate to find house, fooled by the Realtor games.

The average person will look and think it's a new listing. We can't consider the Piggs or anyone who is monitoring the market. The MLS # change will just annoy us. I just pity those who believe it is a new listing and don't know any better. Some are too trusting and if you don't do your homework and rely on others, they can easily be fooled.

In fact, Dataquick DOM is a worthless number. They just track the MLS # and not the address. That is frustrating b/c many people look at those numbers for future outlook and rely on those data figures and it is far from accurate.

JP:
What do you see as being the net negative effect upon those who are fooled?

If a place has been on and off the market, say a year. It continues to get relisted as "new" but no change in price, that tells me it is really not priced right.

Someone who has not done their homework and studied the area they intend to buy in, comes across a "new" listing and may be persuaded into thinking it is a good price and should act quickly.

They may buy something and it may not be an informed decision. Had they known, for example, it was relisted as "new" for a year, they may drive a harder bargain and offer a lower price or not buy it b/c it isn't priced right.

That's just quick off the top of my head. It just seems deceptive and I've seen many that do it, which makes me think it must fool some people or they wouldn't do it.

I guess a net effect would be a purchase that perhaps wouldn't have occurred. There are probably other effects. I just personally don't like that realtors resort to such tactics.

JP:
It sounds like you are basically just saying that people who don't do homework make poor decisions.

But getting back to the specific complaint:
Here is an example. I have a place with a market value of 200-250. If I insist on listing it with a 60 day contract for 400 I am certain I would find some agent dumb enough to list it on those terms.
Further, if I switched agents (staying with these terms) every 60 days for a year, those listings would all be separate. Would it be your preference that agent #6 "inherit" the listing that was originally penned by agent #1?

It seems unfair to make someone a part of an earlier contract. Creating a new contract (which necessitates a new listing entry) seems reasonable here. Would you disagree?

I see. So there's nothing wrong w/the price. It's just the agent that's bad. Just make it a 60 day listing and change the agent every 60 days until you find a good one that will sell it. Now it makes sense. On your example.

The ones that still have the same agent that do "new" listings, the burden rests w/the buyer to do homework.

Also, isn't there something in the contract that says after a listing expires the agent has some sort of claim to commission if the property sells w/in a certain period of time? I admit I'm vague on that.

Also, to add, "It sounds like you are basically just saying that people who don't do homework make poor decisions."

Some people don't do their homework b/c they rely on realtors since they're the "experts" and many people place a lot of trust in realtors.

Regarding the example:
No. In the example the price is stupidly high but the seller sees the problem as the agent and not the market and high price. He switches agents every couple months. This is pretty common.

Regarding people trusting agents and doing their own homework:
Perhaps I framed it harshly. However, I think it reasonable to say that those who are less informed are often at a disadvantage. The educational and experience burden to get into our business is very light. Also, the nature of it is rather complex. One is half a salesman (which I am terrible at) and half consultant (which I think I am good at).

Regarding the concept of listing history as a determination of value:
I think this gets overplayed a lot. What somebody wanted for the property months or years ago is not all that relevant. The buyer decides value. While sometimes, the listing history might give you an insight into the relative desperation of the seller, psychological components matter a lot less than whether the property is listed for an appropriate market amount. It would probably be better (based on principle not logistics) if properties were just listed with no price and then took bids as they came in.

Regarding the "safety clause" after expiration of the listing:
This states that if I show somebody the property *during* the listing period and they buy it within (x) number of days after the listing period, then I get a commission. That number of days is the "safety period". The reason for this is that if I had a listing getting ready to expire and had no safety clause, then I would have no incentive to show the property (other than fulfilling terms of the contract) for the last several weeks of the listing period. It seems reasonable to me considering that deals usually take a few weeks to close once escrow opens.

Welcome to the real world.

UR - Thank you for the clarification and explanation.

UR,

"Some people don't do their homework b/c they rely on realtors since they're the "experts" and many people place a lot of trust in realtors." - JPinPB

"...someone who is looking out for your best interest.." - NAR radio spot

Isn't it what NAR advertises on the radio that someone can go about their regular business and the agent will take care of it for you.

Do you think it is or should be normal practice for the agent to inform the buyer of all recent past listings for a property before submitting an offer?

Lucky in OC

Dear George,

Our MLS does not allow us to cancel a listing and relist it in under 30 days. If the listing expires, it can be relisted 24 hours with the same agent if a new listing contract is signed. If an extension is signed, the listing is merely extended.

If the seller wants to change the overall terms of the listing and perhaps even the commission, there are many times when a fresh, new listing is called for. Not only does appear new on the market, which cleary infuriates you, but it gives the listing agent a chance to actually, physically "re-enter" the data in our MLS and change whatever it was that the seller agreed to change.

If a property is listed 400 times it's completely irrelevant to a buyer who wants the property. For those occasions when a scoundrel agent cancels and re-lists, it is up to our board of Realtors to police it and they do.

We are in a conundrum of a market with properties often not selling for 180 days or more. A listing can become very market fatigued and often it's best to let it expire and relist it with the agent of your chosing as a seller.

If you continue to go with your existing agent, and may sellers do, a new contract is required to physically relist the whole thing.

An extension agreement, one page, is all that is required to keep the tired thing going.

With all due respect, a properly relisted home, even with the same agent, is not considered damaging to anyone.

I think that it should be normal practice for an agent to inform a buyer of any factors that could better advise them with respect to value and strategy.

Sometimes those factors include past listings.

Ergo, I think it important to mention past listings to a client.

Caveat: For many intelligent home buyers, adding information can confuse or muddy reasoning. Its not that the buyers are ill-informed or lack reasoning skills. It is the fact that a comparative lack of experience in this area may cause one to place disproportionately great amount of emphasis on less relevant criteria. It is for this reason, that adding potentially irrelevant data can be a disservice.

Here is an example: I recently had a client who is exceptionally skilled at his one-man retail business. He is very smart and very savvy. However, as a first time buyer, he kept wanting to focus on what the seller was "really after". This is something that might be suited to his area of expertise but is not helpful when dealing with REO agents handling dozens of files who represent asset managers handling hundreds of files who contract with bank managers handling thousands of files. They want money and good terms. Mostly money. Also, he wanted to negotiate on small terms. It took me a while to realize that it was best to just not mention that the bank requires a specific title company or uses a specific form to disclose lead hazards. It just does not make sense to lose a house at 10% under market because the seller insists on First American instead of Chicago Title.

Similarly, sometimes a buyer can miss the forest (the bargain) for the trees (the previous months of listings). Sometimes agents owe it to their clients to take that into consideration. Agents really need to provide guidance and consultation along with the facts.

I apologize if that is not as black and white as what you might look for. However, I think it relevant to point out that looking out for your clients requires using your brain as well as just telling facts.