I'm currently in search of my first multi-family live-in property. And I've noticed something that was odd at first. Some properties have been listing for say... $500k and after a month or so of no offers, they'll delist the property and re-list it for $470. So that the previous $500k price never shows as the original price. This means that if/when they sell for $470 (or close to that) the MLS will show a really high percentage of sell to asking price in that area.
I noticed something was weird when my realtor said that this particular neighborhood in Chicago had a 97% sell price to asking price. This got me to doing the research and this is what I found/realized after some time. Is this standard practice elsewhere? (I'm in Chicago). It just seemed really unethical to me, but I am a rookie at this so I don't know if this is the norm or not?
so being deceptive about a property makes it look better!
Hi @Byron W.
I am not familiar with the rules of your MLS so they will vary. Data miners will have different opinions as well. So it may be region or town/city specific. That being said, the 500K property may have had a 30 day listing. (Give me 30 days, if it doesn't sell then let me do it my way... at 470K !) Owners drive the listing price, agents can't choose. But we can offer to let them do it at their price for X days.
For instance Zillow has a "Make me move" option. So "ASKING PRICE" is really way over market value. If it never sells, then how does that effect global market values? So it is really more of a statistics question then an ethical one in my opinion.
Good Luck and wish I had a decent answer for you
It’s not unethical or intended to fudge the listing percent sold numbers......it’s just that a property presents better psychologically if it shows as “$470k, on the market for 2 weeks” as opposed to “$470k, reduced from $500k, been on market for 8 weeks”.
Well it is very very common practice. It is certainly allowed and not breaking any rules. Claiming it is ethical I would say is stretching it.
The very purpose is to mislead buyers about the true price history of the property. In my mind, that makes it unethical and I would prefer it doesn't exist. It isn't the worst thing ever but it isn't right.
Also the express purpose is not to mess with the listing percent sold however everyone knows it does do that and they still tout listing percent numbers to influence buyers and sellers so again, it is not completely above board. They are still giving statistics that they know are misleading.
But hey Realtors have never been known to be the most scrupulous of people. So expect a lot of this type of stuff in Real estate.
It’s not unethical or intended to fudge the listing percent sold numbers......it’s just that a property presents better psychologically if it shows as “$470k, on the market for 2 weeks” as opposed to “$470k, reduced from $500k, been on market for 8 weeks”.
Well it is very very common practice. It is certainly allowed and not breaking any rules. Claiming it is ethical I would say is stretching it.
The very purpose is to mislead buyers about the true price history of the property. In my mind, that makes it unethical and I would prefer it doesn't exist. It isn't the worst thing ever but it isn't right.
Also the express purpose is not to mess with the listing percent sold however everyone knows it does do that and they still tout listing percent numbers to influence buyers and sellers so again, it is not completely above board. They are still giving statistics that they know are misleading.
But hey Realtors have never been known to be the most scrupulous of people. So expect a lot of this type of stuff in Real estate.
That's not entirely true. I can't claim to know every Realtors intentions but just speaking for myself, I've used this tactic to gain more exposure for a significant price drop. That's it. Any Realtor can see the cancelled listing. Every buyer can ask their Realtor for the listing history of the property. It's more of a marketing technique than anything (in my circle at least).
Also, I didn't realize there were Realtors touting the percentage of ask price to contract price. I think it's a meaningless statistic. Look at the comps and look at the property. Offer what you think it's worth.
It’s not unethical or intended to fudge the listing percent sold numbers......it’s just that a property presents better psychologically if it shows as “$470k, on the market for 2 weeks” as opposed to “$470k, reduced from $500k, been on market for 8 weeks”.
Well it is very very common practice. It is certainly allowed and not breaking any rules. Claiming it is ethical I would say is stretching it.
The very purpose is to mislead buyers about the true price history of the property. In my mind, that makes it unethical and I would prefer it doesn't exist. It isn't the worst thing ever but it isn't right.
Also the express purpose is not to mess with the listing percent sold however everyone knows it does do that and they still tout listing percent numbers to influence buyers and sellers so again, it is not completely above board. They are still giving statistics that they know are misleading.
But hey Realtors have never been known to be the most scrupulous of people. So expect a lot of this type of stuff in Real estate.
That's not entirely true. I can't claim to know every Realtors intentions but just speaking for myself, I've used this tactic to gain more exposure for a significant price drop. That's it. Any Realtor can see the cancelled listing. Every buyer can ask their Realtor for the listing history of the property. It's more of a marketing technique than anything (in my circle at least).
Also, I didn't realize there were Realtors touting the percentage of ask price to contract price. I think it's a meaningless statistic. Look at the comps and look at the property. Offer what you think it's worth.
Well you can justify the reasoning for doing this...and I am sure it works to get more exposure but that does not mean it is not misleading to the buyer. It is. Even if they "can" find the information available, it is still more obscured than it should be.
If the property has been on the market 1 month and was dropped in price. The listing "should" reflect that information. When you cancel and relist, you are circumventing the intended system. You have a justification for it, fine. And it works, fine. But that is not the intent of the system. The intended way to do a price drop is to do a price drop, not to make it appear new when it isn't.
>Carol Lloyd, who writes a real estate market column called "Surreal Estate" for the San Francisco Chronicle, describes the practice as >"the real estate equivalent of turning the odometer back to zero." Yet Lloyd acknowledges that the practice is widespread, as many >professionals consider it ethical because it serves the best interests of their clients who are trying to sell properties.
I guarantee if you call MRED and ask, should I drop the price or is it cool if I delist and immediately relist to reset the DOM, they will tell you to do the price adjustment.
Here's another
>As the white-hot real estate market cools to a simmer and homes get harder to sell, some real estate agents are hiding from prospective buyers the number of days properties have been on the market and how far prices have fallen, a Star-Ledger analysis found.
These agents are canceling listings in databases known as Multiple Listing Services and creating new ones for the same homes. That resets the sales clock and masks price reductions, both important pieces of information for buyers.
The practice, legal but under fire in other states, can be helpful to sellers and their agents, who want properties to seem as attractive as possible. But critics say it is often misleading.
"It's deception," said Michael Lyon, president of Sacramento, Calif.-based Lyon Real Estate and a board member at MetroList Services, one of the largest MLS databases on the West Coast. "Anytime you reset something to make it look newer, better, you're trying to deceive someone."