Are Listing Agents influencing the Market?
Listing Agents Influencing the Market?
That “P“on the Listed Property in the MLS
Recently I post about Home Pricing (What Price is your Home?). I have yet to conclude on that Post.
If you have ever searched the National Association of REALTOR® Multiple Service Listings, the MLS, for properties, you would have found it reports "accurately" updated market data. This data is in near real time, pricing, and current Status. You cannot be serious about buying or selling a property without using the MLS service. You are looking at the same information real estate agents start their deals with.
Many public properties seekers bounce around site-to-site, looking for homes in all the wrong places, that they are fooled into believing they are getting accurate information. Some third party sites may get a feed off of the main MLS however they don't update as quickly if ever. The property listed on their site most likely is placed there by the listing agent. The NAR MLS governs with "rules and regulations"; real estate agents are penalized failing to abide by these rules. Third party sites like Trulia, Zillow, HomeFinders, and countless others does not. They do provide a service, but it a self-serving one that generate profits until itself. Their primary existence is to capture the information about people, names, addresses and phone numbers. Then they will use their sites not only to sell advertising, but also leads from the capture information. Most information found about properties on these sites are questionable.
The “P” on listing properties in the MLS, stands for PENDING. Pending means an agreement in principle was reach between a potential buyer and owner of that property at arms-length. There is an executable contract. he property is under a process of changing ownership. Listed in this agreement, is a date, closing date, of exchanging money to the owner, and key to the new owner, who was the potential buyer, and now the new owner.
The concern here, the status of that property was changed from active (being for sale) to under contract,( no longer for sale: off the market). The agreed price is kept from the public and others in many cases. How good are the CMAs or BPOs being performed.?
The troublesome issue here, this price is the actual fair market value at that present time of the agreement. Other houses for sale in the area are affected by this price. This price could be lower than the posted price, it can be higher if there were multiple offers subject to a deadline. Seller motivation can play a huge part here.
In my opinion, this is an injustice in multiple ways. First, the consumer is left in the dark. They won’t know what that house sold for till recorded, not when it went under contract. The listing agent won't give this information out to other agents, thinking it is not proper. The market is still a mystery. The MLS rules state: if the seller signs anything regarding pricing or status change regarding the listed property, these changes are made and are reflected in the listing in the MLS.
Second and perhaps most important, other REALTOR® won’t know as well. Why is this important? Real Estate agents value homes based on opinions of other listed properties, as well as other homes bought and sold, within a period. Sold homes are facts. Listing prices are opinions. The adjusted price that placed the home in Pending status is facts as well. This information was subject to market conditions at that time. Guidelines for CMA (Comparable Market Analysis) are, three listed properties (for sale), and three sold properties and three properties that under contract to close. The “P”, pending properties that are most similar to the subject property being placed on the market.
As pointed out in (What Price is your Home?), Real Estate Agent are placing properties on the market way above their value, based on pending and sold prices. Every day in Market Watch, the amount of price decreases are way too high, for the market that exist today. The Average DOM ( Day on Market ) was below 40 days in December. Just about the amount of time it would take to close on a home brought on financing.
Do you see my concerns? What are PENDING properties? They are nothing more but an extension of listed properties~! Not the real, live, actual, fair market value at the time of the meeting of the mind between the buyer, and seller when the property went from Active Status to Pending as they should be. The percentage different could be small. But if small, that would have been done via negotiations. Collectively, it can add to the accuracy of the subject property, (a home about to be placed on the market for sale) when comparing and adjusting comparable houses to the subject to reach a price for sale on the subject home. This price, is based on others homes in the neighborhood. Those pending. Those sold within a year or less preferably. Being objective, the only reason for not changing the listed price, to the agreed upon price between buyer and seller, would it interferes and influences the market. Are listing agents interfering with the market? I thoroughly understand Sellers not wanting to have this information disclosed. What is an educated consumer? How does this not stop other buyers from making the same offer on other homes in the neighborhood; Sellers from refusing the same offer? Some states do not disclose sold price information. Not even in the public records. Florida is not one of them.
The IRS define Fair Market value (IRS Publication 561): Fair market value (FMV) is the price that a property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts
CMAs and BPOs are not being done correctly. Data in, won't produce an opinion based on known facts, alias, Fair MARKET Data, known Sold and Pending priced ( listing pricing adjusted to the agreed price between the owner and potential buyer).
Thanks for taking your time to read this post. Your opinions matters.Comments are welcome.
Till Next Time,
Ronald Wolchesky Cell: 239-209-1923 Home: 239-349-4684Email to: Lee_Properties@aol.com/
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