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I've Been Burned !

By
Real Estate Attorney MA 9505496/Broker

Is it just me or is society running amok?  A few days ago, I made a listing presentation to a gentleman who wanted some suggestions on whether to fix up and sell or hold on to his parent's condominium.  The parents had lived there for about 20 years and were recently moved to an assisted living home.

We went over his options - make renovations and fix up the condo for resale; clean and freshen up the condo for resale (i.e. painting and airing out); renting it out; or holding on to it until the market picked up.  This particular unit has what many other competing properties don't - LOCATION.  Our local market doesn't have that many condominium complexes and the last activity at this particular complex was the sale of a similar unit in May 2007 for $620,000 per the MLS.  All units are owner/occupied and there is evidence of pride of ownership.

Well, being the ever diligent agent, I put together a pricing matrix from a limited number of comparable properties, using MLS data.  We looked at what recently sold, what was expired or cancelled and what the current inventory was priced at.  Although we didn't focus on pricing, I did give him some guidance as to where I thought the market was and mentioned that the idea was to price his condominium to be competitive with what was currently on the market, to ensure a quick sale (which is what he and his two brothers want, I think).

I was told that he would also be meeting with two other Brand X brokers to get their opinions.

That was two days ago.  Today, I called to see if he had any further questions for me and asked when he would be making his decision.

He informed me that I was probably out of the running, because I hadn't done my homework.  Obviously perplexed - he seemed very happy with my presentation and consultation - he mentioned that the two other brokers in the running both indicated that the comparable property in his complex (sold in 5/2007) was sold for $525,000.  I had used a sales price of $620,000 in my pricing matrix (the sales price per the MLS).  I told him that I would check the public record and would get back to him immediately.

What do you know?  The public record shows a deed recorded for $525,000 on the comparable property!  I called the seller back and told him that yes, indeed, the property had been sold for $525,000.  I explained that even with that information, I was still comfortable with the pricing matrix that I had presented and suggested that he still follow my guidance to price the home to be competitive with the current market.  I told him that I did not understand the discrepency between the MLS and the public record, and that it would be improper for me to query the listing and selling agents of the other property.  He told me that it wouldn't have been necessary, because the listing and selling agents of the other property were actually the ones he was speaking to about listing his unit for sale.

So, now he's going to reward one of the firms that manipulated MLS data?  I don't get it.  My franchise auditors compare my in-house records with the MLS to ensure completeness.  I had heard about certain firms that inflate their MLS information to improve their statistics, but I never thought I would see it in action! 

I can only stand with my head held high.  I have integrity and believe my advise to the potential client was sound - focus on the current market, don't spend too much time looking at what sold over a year ago.  Am I supposed to validate my market comps with actual research at the registry of deeds?  I wouldn't have thought so.  But I guarantee you, I will only be burned once.  I'm going to recommend to all my agents that they double check the registry records before putting out comparable market statistics. 

As for the "winner" of the listing - shame on you and your firm.  I could "understand" a clerical error of putting in the sales price of $625 (instead of $525), but to input the sales price at $620 was probably not a mistake.    

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Randall Schrader
Competitive Insurance of Dundee - Dundee, FL

Perception is reality!  You could have locked in a tighter time frame and a reason to do so, excluding the out-dated error - FOR GOOD REASON.

Sep 26, 2008 04:00 AM
Robin Gulledge
Remax Capital City - Cedar Park, TX
Cedar Park, TX ABR,CRS,GRI

You should hold your head up high. If we can't depend on MLS data to be accurate then we are in trouble.  Frankly I think we should be required to turn something in after closing with a copy of the transaction or at least the HUD to someone unbiased to submit the information to the board. This would clear up alot of questionable data.

Sep 26, 2008 04:03 AM
Sandy Fenton
Keller Williams NY Realty * Licensed Associate Broker - Mount Kisco, NY
ABR, ASP, CDPE, GRI -Westchester NY - Condos to Luxury Homes

Martin, I am sorry to hear of this.  This has never happened to me, but I have a short story about MLS number manipulation.

Several years ago, I was looking at the hot sheets and noticed that a luxury home priced at over 1M (can't remember exact numbers) was listed twice with different MLS #'s and was "sold" twice.  Too funny.  This was a "high producer."  Now I know why.  LOL

Sep 26, 2008 04:05 AM
Sharon Wager
Hunt Real Estate - Camillus, NY
"Your Blue Jean Agent"

What really bites is that he was talking to the two agents involved with that sale.  You were probably out of the running before you were ever really in, without even knowing it.  Keep your chin up, you'll best them both eventually :-)

Sep 26, 2008 04:06 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

I feel your pain.  Consider it a blessing he probably would have been terrible to work with anyway.  Keep going and hang in there.

Sep 26, 2008 04:08 AM
Marie Meyer
Keller Williams Realty - Central Valley, NY
Orange County New York Realtor

Hi Martin ... I have seen two instances of price manipulation on the MLS.  The only reason I noticed it is because I knew the buyers.  In both cases, the price used by the agents was a price that existed before an appraisal caused the buyer to seek and obtain a lower purchase price.  And in both cases, it was the same RE agency.

Sep 26, 2008 04:19 AM
Winter Baserva
Seasons Realty Group of Atlanta Communities - Atlanta, GA
Realtor -Homes For Sale, Atlanta, GA

Push past it. What goes around, comes around!

Sep 26, 2008 04:29 AM