Rewinding real estate
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Tess Vigeland: One of the first things potential homebuyers want to know is how long a house has been on the market. The older the listing, the more desperate the seller — or at least that’s the thinking.
But these days, it’s fairly standard for homes to be on the market for months. That’s led some sellers to resort to a questionable tactic that makes old listings look new again.
We asked Marketplace’s Dan Grech to explain.
Dan Grech: Carl Jones picks through the carnage of the housing market. He’s research director for Condo Vultures, a real estate brokerage in Miami.
Today he’s scouring the property database for an example of relisting. That’s when a seller takes a property off the market, then puts it right back on to make it appear to be a brand new listing.
Carl Jones: This is actually a perfect example here. This is one of the top luxury buildings in South Beach.
It’s a 600-square foot studio apartment in The Setai. It sold for $688,000 in late 2005. Four months later, the buyer put it back up for sale at $1,000,000, but as the real estate market tanked, the price was cut and cut again.
After a few keystrokes, Carl discovers there’s more to the story:
Jones: We flip over onto this side, we can see that it was actually switched from this MLS number to this MLS number here.
That switch… that’s relisting. When a house or condo goes up for sale, it’s assigned a Multiple Listing Service — or MLS — number. When you relist, you reset the clock.
[clip from “Ferris Bueller’s Day Off”]: The 1961 Ferrari 250GT California…
Ferris Bueller’s Day Off. Remember at the end when Ferris and Cameron run the Ferrari in reverse to roll back the odometer? That’s relisting.
Again, Carl Jones:
Jones: It’s giving it a new number, it’s a new identity and if you don’t know what you’re doing, you’re not going to know the full history of this property. You have to go looking for it; you have to know what you’re looking for.
It turns out the Setai studio apartment has a long history of rejection.
Jones: You’re seeing the price start at a high and then drop again after six months. That property was relisted — same agent, new MLS number — again, goes back up to the high that it was six months previous and then it starts to drop again.
Eventually the property was yanked off the market.
For brokers in a down economy, relisting can be a powerful tool. That’s because each morning, new listings are added to what brokers dub the “Hot Sheet.”
Ilyce Glink runs ExpertRealEstateTips.net.
Ilyce Glink: When a property is listed, it instantly alerts brokers. You’ll see in somebody’s email; it pops up: Pop, pop, pop, pop, it’s all hot stuff.
Glink says if a seller drops the price or improves the property, relisting is a legitimate way to announce the change. It’s also a questionable way for brokers to promote themselves. Many agents use relisting so they can claim to sell homes faster than their competitors. Other agents use relisting to hide a property’s troubled past.
Peter Zalewski is founder of Condo Vultures.
Peter Zalewski: Many of the agents are trying to relist just to get savvy buyers off the scent that there might be some distress with the particular property. The goal is go in there aggressively, come in with a high price and hope that your pie-in-the-sky price might actually find a sucker.
Each region sets its own rules about relisting. In Minneapolis, you can take down a property and immediately repost it. In Sacramento, one third of all “new” properties were actually relistings — that is, until the local listing agency clamped down on the practice. Now, a property can only be relisted if the price is cut or the property is improved, say with a new paint job. Other regions have gone further, imposing 30 day minimums between listings.
Ron Shuffield is president of EWM Realtors, Miami’s second largest brokerage. He says a buyer’s best strategy is to hire an established firm that will research a property’s listing history.
Ron Shuffield: We don’t encourage relisting. It’s certainly not something we ever include in our training. Our managers don’t talk about it, I don’t talk about it. I would say that there are other methods that we have found are more productive than that.
Like facing the reality of a down market and pricing the home properly from the start.
I’m Dan Grech for Marketplace Money.
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