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Auctions in the MLS

By
Real Estate Agent with Florida State Realty Group, Inc BK3089599
The newest "marketing" twist by several Realtors is to advertise their properties in the MLS as having an auction at some point in the near term. In the meantime, the quote that the seller will consider all offers starting from a low ball price that is listed. This is acceptable providing that the MLS allows auction listings. Some do not and some have yet to consider prohibiting them. 

 The real problem is that some of these Realtors load this low ball price (a/k/a starting bid) into the LP (listing price) field of their MLS. When doing a search if there is not any minimum price set their listing will generally be first on the list as the low price. Unfortunately, that price also propagates over into www.Realtor.com , Florida Living (FAR’s website) and all IDX systems.  We started getting calls from clients off of our website to look at some of these properties. When the clients were advised these prices are not the actual listing price they were not too happy.  In fact, a few wanted to file complaints.

 

Hopefully, our MLS association will start to police this type of unethical conduct and it will be reduced or preferably eliminated.

 

joanne Douglas
Terrie O'Connor Realtors - Ridgewood, NJ
The only real damage I can see here is the skewing of the aggregate percentages if the $1 LP is used in the calculation.  I don't think any of the MLS's will let this go on for very long.
Sep 28, 2006 03:24 PM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI
Contrary to a few of the replies it is a violation of NAR's MLS Policy 1.7 which requires the "list" price to be entered into the listing price field of the MLS. There is another MLS policy that requires the listing Realtor to notify the MLS and its' participants of any seller that refuses to sell at full price. Furthermore, there's NAR's Code of Ethics Article 12 which requires Realtors present a "true picture" to the public in their advertising. Although some of these "auction disclaimers" are in the MLS listing itself these remarks do not propulgate into the IDX and Realtor.com feeds to the public. Therefore, the public is misled which also raises the possibilty for action by state licensing authorities for deceptive advertising.
Sep 29, 2006 12:28 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

Ah - Great Post.  The problem with that is the state licensing authorities conflict on real estate ad requirements and auction ad requirements.  Right now in Ohio, the Dpt of Ag. requires the auctioneers name in any ad.  MLS does not allow names in the remarks.  Agriculture considers MLS an advertisement, not any type of offer or guarantee to sell.  Therefore the auctioneers name must appear in the remarks to remain compliant.

As it stands right now, MLS in Columbus OH is allowing auctioneers names so they can comply with the understanding of the underlying law.

I guess that if the general public would use a Realtor all the time, there would not be any issue of a mis-lead public.  Realtors would know that an offer to sell at $1 requires additional investigation into the terms, wouldn't they?

Sep 29, 2006 12:42 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH
Another point to make here is that the auctioneer is listing the property AND comments in the MLS in this example, not posting to realtor.com.   Should IDX issues and reator.com issues cause the total remarks to be abbreviated that can not be blamed on the poster.
Sep 29, 2006 12:53 AM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI

If the poster is a Realtor they are subject to NAR's Code of Ethics. The listing Realtor is 100% liable to insure that their listing is correctly reflected in all forms of advertising to the public.

Sep 29, 2006 02:59 AM
Robert Mayo
Mayo Auction & Realty - Your Kansas City Auctioneer - Kansas City, MO
CAI, AARE, AMM, GPPA

Stephen,

There is nothing deceptive about correctly placed auction listings. Each MLS sysytem has it's own requirements for how pricing is addressed in regards to auction listings. Those MLS systems that do not allow auction listings are a completely different category.

In our MLS there are specific requirements that we abide by and specific questions that we answer as a requirement to make it clear to the agents who are reviewing these properties for potential buyers.

Sep 29, 2006 03:05 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH
Sure - All ads that they place.  I would argue that some third party vendor pulling information and replacing on other locations can not be the repsonsibility of the poster.  For example, you go to my website and pull off information to give to your client.  If you didn't take everyhting that I put up there, but were selective, this is not my fault.
Sep 29, 2006 04:43 AM
Robert Mayo
Mayo Auction & Realty - Your Kansas City Auctioneer - Kansas City, MO
CAI, AARE, AMM, GPPA
Rich makes a good point.
Sep 29, 2006 09:37 AM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI

It’s not the same thing. Every Realtor knows or should know what will be pulled into the IDX and Realtor.com. It’s pretty standard. One cannot absolve themselves of liability by implying blind ignorance.  Furthermore, the loading of such a false “listing price” into the listing price field is an MLS violation in and of itself. That’s where the problem really beings. Don’t violate that policy and there will not be any of these collateral issues that develop.

Sep 29, 2006 09:42 AM
Robert Mayo
Mayo Auction & Realty - Your Kansas City Auctioneer - Kansas City, MO
CAI, AARE, AMM, GPPA

Stephen,

You are correct about the policy. My point is that each MLS has a different policy and it is important to recognize this.

Sep 29, 2006 04:16 PM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI

Hi Bob,

Yes, local boards do have different policies.  However, those policies cannot conflict with the NAR Policy. Similar to a federal law vs. state law. NAR prohibits this type of conduct. Local boards cannot allow it. Unfortunately, they may not enforce it. Should NAR become aware of it being an issue than can force it upon that local association.

Sep 29, 2006 11:30 PM
Robert Mayo
Mayo Auction & Realty - Your Kansas City Auctioneer - Kansas City, MO
CAI, AARE, AMM, GPPA

Stephen,

I am interested to see the policy that you reference earlier in your post. I searched our NAR site and was unable to find it. I did however find the following policy regarding idx and the issues we are discussing in this post.

We do put the list price in our auction listings. We also clearly define what the list price means. Since the property is being sold at auction, the definition of list price is not the same.

ild (internet listing display) policy

the following internet listing display policy consolidates and replaces both the virtual office website (vow) and internet data exchange (idx) policies to create a single, unified policy governing the internet display of all property information originating from multiple listing services (mlss) owned and operated by realtor® organizations.

while nar is confident it will prevail, due to the litigation with the department of justice, mlss should wait to adopt the ild policy. for the latest information about ild, vow, and idx go to http://realtor.org/ild


internet listing display policy


i. general provisions.

  1. associations of realtors® and their multiple listing services must enable mls participants to display on participants' public websites ("internet listing display sites" or "ild sites") aggregated mls active listing information, subject to the requirements of state law, regulations and this policy.

    1. to comply with this requirement, mlss must, if requested by a participant, promptly provide basic "downloading" of all mls current listing information, including without limitation all non-confidential data fields, listings types, photographs, and any links to virtual tours. for purposes of this policy, "downloading" means electronic transmission of data from mls servers to participants' servers on a persistent or transient basis.

    2. associations and mlss may also offer, in addition and not in replacement, alternative display options including framing of board, mls, or other publicly-accessible sites displaying participants' listings (with permission of the framed site). this policy does not require associations or mlss to establish publicly accessible sites displaying participants' listings.


  2. mlss may require that the participant (1) utilize appropriate security protections, such as firewalls, provided that any security obligations imposed on the participant may not be greater than those employed concurrently by the mls, and/or (2) maintain an audit trail of consumer activity on the ild site and make that information available to the mls if the mls has reason to believe that the participant's ild site has caused or permitted a breach in the security of the data or a violation of mls rules related to use by consumers.

  3. unless state law requires prior written consent, each participant's consent for display of that participant's listings on the ild site of other mls participants is presumed unless a participant affirmatively notifies the mls in writing that it has withdrawn consent to such display ("opt out").

    1. a participant that opts out may not display on its ild site(s) (including by framing any other website), if any, the listings of any other mls participant provided by the mls.

    2. a participant that opts out may not permit display of its listings on any ild site of any other participant. it may, however, display its listings on public websites of third parties, including but not limited to realtor.com.

    3. a decision to opt out may not be revoked for a period of ninety (90) days from the date the decision becomes effective.


  4. an mls that provides an ild-specific feed of listings that excludes the listings of participants that have opted out shall also identify for recipients of the feed those listings provided by participants who have opted out.

  5. participants operating ild sites may provide to consumers via other delivery mechanisms, such as email, fax, or otherwise, the listings of participants who have opted out.

  6. except as provided elsewhere in this policy or elsewhere in the rules or regulations of an mls, mls databases of current listing information, or any part of such databases, may not be distributed, provided, or made available to any person or entity.

  7. except as expressly permitted herein, mlss may not adopt rules or regulations that are inconsistent with these policies.


ii. policies applicable to participants' ild sites

  1. any participant that wishes to establish an ild site must notify the mls of its intention at least 10 days in advance of establishing the site and must make its ild site directly accessible to the mls for purposes of monitoring/ensuring compliance with applicable rules and policies.

  2. participants must protect ild information from misappropriation by employing reasonable efforts to monitor and prevent "scraping" or other unauthorized accessing, reproduction or use of the mls database.

  3. listings or property addresses of sellers who have affirmatively directed their listing brokers to withhold their listing or property address from display on the internet shall not be accessible via ild sites. however, a participant may display on its ild site the listing or property address of consenting sellers who have listed their property with the participant.

  4. participants may exclude listings from display on their ild sites based only on objective criteria including, but not limited to, factors such as geography, list price, type of property, type of listing, cooperative compensation offered by listing brokers, or realtor® membership held by the listing broker.

  5. participants must refresh all mls downloads and refresh all mls data at least once every seven (7) days.

  6. except as provided elsewhere in this policy or elsewhere in the rules and regulations of an mls, a participant operating an ild site may not distribute, provide, or make any portion of the mls database available to any person or entity.

  7. when displaying listing content, a participant's ild site must clearly identify, in a readily visible color and typeface, the name of the brokerage firm under which it operates.

  8. a participant who has opted out pursuant to this policy shall provide notice to sellers who list with such participant that, in accordance with the participant's decision to opt out, the seller's property will not be available for display on the ild sites of any other mls participant. participants shall make such disclosure to sellers and receive confirmation of such disclosure from sellers using a document that conforms to the "seller internet display choice form" attached to this policy as appendix 1.

    1. a participant who has opted out shall obtain the seller's initials on the "seller internet display choice form" prior to entering into a listing agreement with the seller and shall retain such form for at least one year.

    2. a participant who has opted out shall also, using the "seller internet display choice form," provide the seller the opportunity to select to have the listing included among those that participants operating ild sites may display. in such cases, the participant shall notify the mls at the time it submits the listing that the listing may be displayed on other mls participants' ild sites. a participant may decline to accept a listing from a seller who requests that his property be available for display on other mls participants' ild sites.


  9. mlss may not prohibit or regulate display of advertising or the identification of entities other than the operator of the site on ild sites ("branding" or "co-branding"), except:

    1. to impose the requirements of iii. 5 and 6 of this policy, or
    2. to prohibit deceptive or misleading advertising or co-branding.

    for purposes of this provision, "co-branding" is deceptive or misleading if a reasonable consumer cannot readily determine the identity of the operator of the site

  10. participants may operate more than one ild site.

  11. mlss may not prohibit participants from enhancing their ild sites by providing information obtained from sources other than the mls or additional technological services such as mapping functionality.


iii. policies recommended for adoption by multiple listing services to be applicable to participants' ild sites.

the following guidelines for ild sites are recommended but not required provided, however, that except for iii.12, mlss may impose such requirements only if equivalent requirements are imposed on participants' use of mls listing data via all other delivery mechanisms.
mlss may:

  1. prohibit display of expired, withdrawn, or pending listings, or listings of properties that have been sold by other participants.

  2. prohibit display of confidential information fields intended for cooperating brokers rather than consumers including compensation offered to other mls participants, showing instructions, property security information, etc.

  3. prohibit display of the type of listing agreement, e.g. exclusive right to sell, exclusive agency, etc.

  4. prohibit display of seller's(s') and occupant's(s') name(s), phone number(s), and e-mail address(es)

  5. require that any listing displayed identify the listing firm in a readily visible color and typeface not smaller than the median used in the display of listing data

  6. require that the identity of listing agents be displayed

  7. require that mls listing information displayed not be modified. mls data may be augmented with additional data not otherwise prohibited from display as long as the source of the other data is clearly identified. this requirement does not restrict the format of mls data display or display of fewer than all of the available listings or fewer authorized data fields.

  8. require that any display of other participants' listings indicate the source of the information being displayed, e.g., the mls.

  9. require that listings obtained from sources other than the mls, e.g., from other mlss, from non-participating brokers, etc., display the source from which each such listing was obtained

  10. require participants to indicate on their websites that the information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties that consumers may be interested in purchasing

  11. establish reasonable limits on the amount of data/number of listings that consumers may retrieve, download, or be provided in response to an inquiry, but in no event may the limit be fewer than 50 listings.

  12. limit the right to display other participants' listings to a participant's office(s) holding participatory rights in the same mls

  13. require a notice on all mls data displayed indicating that the data is deemed reliable but is not guaranteed accurate by the mls. participants' ild sites may also include other disclaimers necessary to protect the participant and/or the mls from liability.


iv. additional optional policies

  1. mlss may, but are not required to, limit the right to operate an ild site to mls participants licensed as real estate brokers.

  2. mlss may, but are not required to, allow non-principal brokers and sales licensees affiliated with mls participants to operate their own ild sites. ild sites operated by non-principal brokers and sales licensees affiliated with mls participants are subject to the participants' consent and control and the requirements of state law and/or regulation.

  3. mlss may not prohibit participants from downloading and displaying or framing listings obtained from other sources, e.g., other mlss or from brokers not participating in that mls, etc., but may, as a matter of local option, require that an ild site be searched separately from listings obtained from other sources, including other mlss.

  4. mlss may,as a matter of local option, charge the costs of adding or enhancing their "downloading" capacity to participants who will download listing information. assessment of such costs must reasonably relate to the actual costs incurred by the mls.


effective date: this policy shall become effective on august 31, 2005. mlss shall have until july 1, 2006 to adopt and implement it. participants shall have not later than ninety days following adoption of this policy by an mls in which they participate to cause their internet display of mls listings to comply with such mls policy.

appendix 1:

seller internet display choice form

1. i have been advised by [participant] that, if i select him or her to represent me in the sale of my property, my listing will not be displayed to buyers searching for properties on internet websites operated by other brokers in my community.
____________
initials of seller


2. i have been advised by [participant] that i can choose to include my property among those that may be displayed to buyers searching for properties on internet websites operated by other brokers in my community.
____________
initials of seller

3. seller should circle one of the following:

a. i choose to have information about my property be available for display on other brokers' internet websites.
or
b. i choose not to have information about my property be available for display on other brokers' internet websites.


Oct 02, 2006 03:09 AM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI

Hi Bob, it's NAR MLS Policy - Part Three (pick your model) Section 1.7.

http://www.realtor.org/2006mlshandbk.nsf/pages/homepage

section 1.7 listing price specified

the full gross listing price stated in the listing contract will be included in the information published in the mls compilation of current listings, unless the property is subject to auction. (amended 11/92) m

The "m" indicates this is a mandatory requirement.

Then there is Part Two - Section D 

subject: auction listings

part title: part two: policies
component title: d. data
area title: current listings
section title: section 7


text:

multiple listing services may, as a matter of local discretion, accept exclusively-listed property subject to auction. where listings subject to auction do not include a listed price, they may be published in a separate section of the mls compilation of current listings. (adopted 11/04) o

The "o" at the end indicated optional. Local MLS are not required to adopt this policy. The "unless this property" is subject to auction" in 1.7 refers to those listings wherein the local MLS has adopted an auction policy.

 

Oct 02, 2006 04:21 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

It sounds like the policy allows the auctioneer to put in $1 if the property is subject of an auction then, right?

Oct 02, 2006 07:19 AM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI
That's what I had thought it possibly could have meant also.  I called NAR and was advised that the "unless the property is subject to auction" relates to only if the local MLS has adopted the policy as contained in Section 7 which is optional.  They were very clear that the only amount allowed in the listing price field is what the "written listing price" is - nothing less or more. I believe they could tighten that languange up a little bit.
Oct 02, 2006 07:39 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

This sounds like a clear case of trying to fit the square peg in the round hole.  No matter how hard we try, the best we are going to get is a bad fit.

Lucki;y, most IDX pulls are bringing the REMARKS in, unless you are talking aobut realtor.com and there is an extra fee.  Don't get me going.

I still think that you will find more professional auctioneers WANT to provide more disclosure than they need to.  At least that is the case with most that I know around the country. 

Oct 02, 2006 08:24 AM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI
Exactly. However, Realtor.com is really only about $30 on average to have a Showcase account. Plus, that $30 includes the ability to add the little red house virtual tour link at no additional charge. If it's not worth a $30 investment (if even that) and many auctioneers require advance marketing fees in the thousands from the sellers - then the Realtor/auctioneers shouldn't enter into into the MLS or not allow of internet displays or probably don't even take the listing - $30?
Oct 02, 2006 09:09 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

I suppose it gets to be the principle of the thing.  How much do I need to spend to correct the bad info being distributed by all of the wrong sources before I just run out of money.

Also - We fight for every dollar that gets paid upfront.  Imagine how tough it would be for you to go to your sellers and get up front money?  Now imagine you get $5000 from them and then say "oh, by the way, I need an extra $30 to pay realtor.com to correct the error that they cause when they pull the listing information to their site."  Right after that, I explain to them that most of the buyers come from my direct marketing to them, not from realtor.com, but I need to make sure realtor.com is correct.

They are just as excited to pay it as I am, especially since I am trying to push the public to my website.

Taking the listing and putting it into MLS is going to get it on MLS and correctly onto other broker sites.  It is in the best interest of the other agents in the area to have the information so they can come to the auction and make money for limited work.  It is in the best interests of the buyers to go to those agents and get some type of representation.

$30 here and $30 there.  Where does it end?  Trust me, if there was a box that said NO REALTOR.COM, but there isn't. 

Thank you Stephen.  You quantified the extortion and didn't waste my time.  Is it only $30 ? Yes.  Am I going to pay it ? No.

While I thank you for the information, it still doesn't mean we are ever going to agree on the subject.  

Oct 02, 2006 09:32 AM
Stephen McWilliam
Florida State Realty Group, Inc - Fort Lauderdale, FL
ABR, CRB, CRS, GRI
I totally understand. I also know that Realtors have been and will continue to be brought in front of Professional Standards hearing panels on Article 12 violations due specifically to internet advertising. Depending on the panel a defense of "delibrent indifference" generally does not fly. It will take either the local MLS or NAR making the local MLS adopt auction polcies. Please do not get me wrong - I want the auction information and believe there is a place for it in the MLS.  However, it does not belong being loaded in a manner that causes a misperception to the public and allow abuse by select Realtors.
Oct 02, 2006 09:51 AM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

The information is not being loaded in a manner that causes misconception.  It is being scraped to realtor.com in part, not in whole, unless the agent is willing to pay the fee.

Go to my post that shows what I posted to MLS compared to what realtor.com is showing.  It it totally different. 

MY MLS LISTING REMARKS-  

3 levels + lower + 2 car. All brick, intact woodwork, pocket doors, 6 FP, pre-renovation, solid mechanicals classic 1900's layout. Near Franklin Park **Disregard Price**- Property to Sell at Auction on Sat., Oct 14 @ 11am. View at Open House Only. Call/email 4 details. Pre-Auction Offers Considered.

REALTOR.COM LISTING REMARKS 

Single Family Property, Area: COLUMBUS/FRANKLIN COUNTY E OF I-71 BETWEEN I-670 A, County: Franklin, Approximately 0.21 acre(s), Year Built: 1920, Three story, Basement, Dining room. 

Aparently it can be same same if I pay up.  This would not be a problem if realtor.com did what the broker sites are doing, but there aint no money in that.  The game is rigged againstthe agent.

This is just one shakedown that I am not going to play along with.

Oct 02, 2006 10:12 AM