Sex, Lies and the MLS: Why What You See is Not Always What You Get

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I believe most people, and even most Realtors, are fundamentally honest. Not only are there moral reasons for telling the truth, but these days, given the number of lawsuits that arise from real estate transactions gone wrong, it is simply good business to be honest. Thus, I am continually amazed by what I find under the secret “agent’s” section of the MLS called the “private remarks.” What, you didn’t know that there was a secret “agent’s” section of the MLS? Well, there is, and it is a repository for all kinds of information that, for whatever reason, the listing agent thought the buyer’s agent should know about the property but did not want to reveal to the general public.

Sometimes there are legitimate reasons for keeping information from every member of the unwashed public that is browsing or some other site. Perhaps the old lady who lives in the house keeps a lot of cats, and you need to call in advance to make sure they are put out before a showing. You should not advertise that fact – some burglars might take advantage of it. Same for the code to the lock box. So it is fair enough to keep that kind of information in the private remarks.

But, I frequently find information that is material (i.e., significant) to the value of the property being offered hidden in the agent’s section of the MLS. Thus, anyone without access to the secret part of the MLS (i.e., who did not have a full MLS subscription or did not have their own agent reading the full description of the property) would be blissfully ignorant of the disclosures made in the secret section. Thus, any offer presented to the listing agent (without the benefit of this information) would not be able to price in the information in the opening offer. While I would presume that the listing agent in a double-agency situation (i.e., representing the buyer and the seller at the same time) would eventually get around to disclosing the material information listed on the secret part of the MLS, it still strikes me as unfair that such information is not disclosed from the outset, so that the potential buyer can decide whether the property is one that meets his or her criteria before making an offer and investing time in the property.

A classic example of this is the agent that puts “total fixer” in the private remarks, but does not disclose that elsewhere in the listing. I’m sorry, but this is the kind of tactic which gives Realtors a bad name. If a client comes to me and is interested in a listing (but not a fixer) and then I have to inform them that the property that looks like a creampuff on the MLS is, in fact, a total fixer, then I have to the be the one to explain why the listing agent thought that the information should be kept from the potential buyer.

I saw one property listed on the MLS which seemed like a great deal from the public section. The private remarks, however, were another story entirely. The private remarks disclosed a sorry tale involving numerous building code citations and even had a long letter from the city attorney to the property owner (by that point, a bank) detailing the serious and possibly irremediable defects in the property. By the time I was done reading it, the property seemed to be a tear down from any reasonable perspective, and not much of a bargain.

The bottom line is that the MLS should be a tool to exchange pertinent information about properties offered for sale – not a tool to “hide the ball” from the unwary and unrepresented potential buyer. But, agents persist in these tactics: as Mark Twain cynically revised the old proverb, “honesty is the best policy – when there is money in it.”

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  1. Even though this article didn’t contain sex, like its title promised, it was still a great post. I don’t know why it still surprises me when clients say a property they found on the MLS didn’t turn out to be what they thought it was. I do think some MLS’s have stiffer penalties than others and discourage its members from posting things in the private section like you mention. At the same time, I’m sure some MLS’s are covered legally with a thousand pages of legalese saying they’re not responsible for information posted on their sites by agents. Agents also have similar paperwork stating they too are not responsible for information given them by their clients.

    You do mention something in this article that I believe really gets to the heart of the matter, the lack of ethic on the part of some real estate agents. If he or she has knowledge of a “material” fact concerning the home being listed and then takes the time to put it in the private remarks section of the MLS this fact should be disclosed to potential buyers, certainly those making offers. If you run into a situation where you have proof an agent knows about a material fact and still does not disclose it you should report that person through the proper channels, most likely a state real estate board.

    I currently hold a real estate license in the State of Washington, which has similar licensing rules to many other states. With that said, the test one must take to get a real estate license is not exactly the hardest test in the world, and with much of the education offered over the internet, there aren’t very many checks and balances in place to make sure applicants really know their stuff. It’s weird that an industry as regulated as residential real estate doesn’t have more stringent requirements for licensing individuals responsible for so many of the transactions. That change, unfortunately, must be enacted by our legislators, which wont happen until their constituents demand it.

    So with all the meandering of this reply, my point is, if you see a problem report it (like the original post does), and in the meantime, push for better education and licensing rules.

  2. If real estate agents are using these private coments to share info that I as a buyer should know, without telling me, then wouldn’t they be liable for holding back if it was for an issue that dealt with a defect in to house or something similar?

  3. The hiding of material facts is not allowed anywhere. It’s against the law and carries severe penalties. The agent’s remarks section is not to be used for that purpose. Typically it contains almost exactly the same remarks as the public section. When it doesn’t it tends to contain information on offer requirements, etc.

    If one is nervous that they are not getting the whole story, use a buyer agent and ask for a full agent MLS information sheet that contains both sections. You won’t be refused.

    When suggesting that even agents are mostly honest I can’t help but remember a classic real estate statement, “buyers are liars”.

    You don’t tell us the truth all the time yourselves. So before casting stones look to yourself. Am I being honest with my agent as I expect him/her to be with me.

    Hopefully both of you are.

  4. One thing to keep in mind is that some agent’s offices do not allow the agent to enter the info into the MLS. The office may have their own policy regarding what goes in the agent to agent remarks. It’s happened to me…For instance, I disclose the property is a short sale in the public description section, but my office moves it to the agent to agent remarks when they enter it into the system. I don’t understand why, but it’s what the office will do. They’ve done that in regards to property condition as well. The local real estate/Realtor’s board also has restrictions on what and how to phrase information at times too. Long story short, it may not be the agent’s fault that the information is where it is. A good agent will always make sure their client is aware of pertinent information listed in the agent-to-agent remarks section.

  5. Here is a compelling reason why Buyers should stop calling yard signs and web listings. Your talking to the agent who works for the seller!! An Exclusive Buyer Agent will have that (non-published) information readily available. They will also find out things (If their good), from and about the seller that the listing agent didn’t even know about! Please note here that any Agent in most states can represent a buyer. But, legally can never represent Buyers exclusively. If your buyer agent works for a Broker who also takes listing and sells homes, they can never establish a Fiduciary relationship with the buyer. National Association of Exclusive Buyers Agents. EBA’s work for buyer only-never sellers!!!
    .-= matt mathews´s last blog ..A LOOMING DOUBLE BUBBLE-PART 2 =-.

  6. Private remarks is NOT a “secret section”. Obviously there must be differences between what public can see and what realtors see on MLS. Matt M is absolutely right. Buyers make huge mistake not getting their own agent who’s gonna take care of their business. If they think they will save some money or get a discount on a property using sellers agent (dual agent) they probably not gonna get the best deal there is. Simple.
    Oh and there’s a whole section on MLS with attached documents like disclosures, floor plans etc. Is this a “secret section” too Ms Foote?

    Ewa Reza
    Realtor – Beverly Hills

  7. Florence Foote on

    This post has attracted quite a range of intelligent comments, most of which I agree with entirely. In response to Ms. Reza, though, I think you need to look at things from the perspective of a buyer who does not have full access to the MLS. Private remarks are “secret” to them, and if you don’t believe me, just ask Karen, who posted a comment above. (If you read the beginning of my post, you will see that I agree there are some things that must remain a secret.)

    In response to Matt, the chances are that the information will ultimately be disclosed before the deal closes — the question is really one of timing. I suspect that an agent who kept material information in the private section would make the disclosure during the contingency period or risk getting sued.

    Like several commentators, I agree that most buyers are better off with a (good) agent. But, almost every buyer starts off by searching the internet for information. And, since the private sections of the MLS are not apparent to them, when material facts are hidden in the private remarks, buyers are at a disadvantage until they manage to get these facts disclosed in one way or another. By the way, depending on the nature of the attached documents, I might well consider them to be material and therefore something which should be disclosed up front to everyone and not just to fellow agents — such as notices of city violations. Why wait? As for floor plans, I’d agree that they should be private, although some municipalities post them on the internet via the assessor’s office, even for properties that are not for sale.

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