Gaming the time on the market and automatically re-listing: what do you think?
I feel for Tammie, trying to compete in the Nashville market when this sort of thing is allowed by her MLS. Two years ago, the San Antonio MLS started to show not only the days on market for the current listing, but the cumulative days on market. Agents can look up the price history of the recent listings and who the agents were. Home buyers can see that if the the cumulative days on the market are very high, they might have some leverage on the price. Sellers can see that it's no longer possible for their listing agents to game the system.
When I am hired to sell a house, if it is in good condition and the seller decides on a reasonable asking price based on the market and the competition, I take the listing for no more than 3 months; 6 months for higher end properties. That seems only fair.
See what you think of Tammie's experience:
Yesterday, while preparing a CMA (comparable market analysis) for a client's property, I came across something that got my blood boiling. What do you think?? Does the following constitute an unscrupulous listing practice?
In July 2008, I showed a house that had been on the market for 184 days. The house was only 4 years old, beautifully decorated and well-maintained. It showed very well but wasn't exactly what my client was looking for. That evening, I responded to an automatic showing feedback request explaining that the property was not right for my client and gave their reaction to the home. I always give feedback to the listing agent so he can discuss that with his seller. Since this property had already been on the market 184 days, I was sure the seller would want feedback.
Several days later, I got a call directly from the seller. I had left
my business card on her countertop at the showing. She asked me if I could give her some feedback from my clients. I explained that I had sent feedback to her listing agent and that she should speak directly with him. She then said, "My listing agent never gives me any feedback. My house has been on the market almost 190 days and I don't know why it's not selling." I gladly explained why my client had passed on the property but then she started to ask questions about the current state of the market and my thoughts as to why her house hadn't sold.
I explained that as long as she was listed with another agent, she would need to speak with him. She said that she had never even met him. He had a large team and she only spoke with agents on his team. She never got the same agent twice. She always had to call them after showings because they never called her. I, once again, instructed her that she would have to speak directly to her listing agent. As long as she was under contract with someone else, I was unable to help her. I did say, however, that if she decided not to re-list with her agent, I would be happy to speak with her.
I decided to put her on my auto-notification list so I would be alerted when her listing expired. About 45 days later, the listing expired and I proceeded to contact her. She didn't even know that the listing had expired. She then advised me that she would call me back when she investigated further.
A little while later, she called and said that she had re-listed with the same agent. She explained that when she originally signed her listing agreement in February 2008, she also signed a document giving her listing agent permission to re-list her property automatically. They just hadn't gotten around to re-listing it in the MLS.
I couldn't believe what she was telling me. I had never heard of such a thing. Why would any seller agree to these terms? It doesn't benefit the seller at all. The only person who benefits from such an agreement is the listing agent. I was shocked.
As I watched expireds appear week after week, I would see this same agent's name again and again. All of his listings had been on the market for many, many days. I placed several calls to these expired listings. The response was always the same. They felt if any agent could sell their house, he could. Besides, they didn't want to get into a confrontation by calling the listing agent and cancelling their agreement.
I didn't understand what these people were thinking. It appeared to me that he was putting a sign in the yard and walking away. He didn't even have to call them again to re-list their home. He did it automatically.
As I was preparing this CMA, I noticed that the home I had shown in July 2008 had finally closed. The house was originally listed for $789,999 in February 2008. When it closed last week, it had been on the market a wopping 821 days. It had been re-listed with the same agent, 17 times with 9 price reductions. It sold for $500,000--63% of the original list price.
When this seller listed her home, the average days on the market was 87 days. However, what the CMA showed is that the property sold within 77 days of listing at 91% of asking price. This agent is manipulating the system to reflect lower days on the market and percentage of listing price. To make it look like he can sell your house under the current days on the market for above 90% of listing.
I can't believe that this woman remained loyal to an agent that failed to produce a buyer for over 2 years. The seller's ability to negotiate price and terms ceased to exist a long time ago.
Between 5/29/09 to 5/28/10, this agent closed 150 listings (remember he has a large team). These 150 listings had been on the market with this agent a total of 21,946 days and had re-listed with him 403 times. That means that each property was on the market an average of 146 days and had re-listed an average of 3 times. These numbers don't even include the expired and withdrawn listings that had smartened up and moved on to another agent.
The moral of this story...as a seller, you owe nothing to the listing agent. His job is to market your home and get it sold in a reasonable amount of time--821 days is not a reasonable amount of time. If you are unsure what a reasonable amount of time is, ask the listing agent for the average days on the market for your area.
Remember, in this case, the agent re-listed his client's homes several times. Why would he do this? Because then he could say that his average days on the market were lower than the actual number of days he had these properties listed. When interviewing agents, question them as to how many times they re-list their properties to reflect those numbers. And never, ever agree to sign a document giving your agent the authority to re-list your property automatically prior to the expiration date of your contract. Make that agent work for the listing or find an agent who will.
Is this an unscrupulous listing practice? You be the judge.
************************************************************************************Contact me:Tammie WhiteKeller Williams Realty(615) 495-0752
Serving the Franklin, Brentwood, Nolensville, Spring Hill, Thompsons Station, College Grove, Leipers Fork and greater Nashville area. All information is believed to be accurate but is not warranted.
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