Re-listing a property already listed for sale completely skews all the numbers used to formulate statistics on our real estate market.
And while I’ve always maintained that “you can make numbers say anything you want,” in this case, the numbers do all the talking…
Another catch-phrase I’ve always enjoyed is, “If it was such a great idea, somebody would have thought of it already.”
I only wish people realized this more often.
When everybody has thought of the great idea, perhaps it’s not such a great idea anymore.
When the real estate market was at its peak, it was quite common for properties to sell within a couple days, or on “offer night” when sellers were holding back offers until a certain date. The greatest fear for sellers and their Realtors was to have a property rot on the market and have the statistic for Days On Market (D.O.M.) spiral out of control.
Simply put, if a house in a hot neighborhood was seen on MLS with the “DOM” showing 38 days when houses normally sell within a week, buyers and their Realtors might be turned off. They might just assume, “There must be something wrong with the property,” and move on.
This is why shrewd Realtors started to re-list properties to give them a “fresh start.”
Turn back the clock! Or at the very least, make that D.O.M. start back at zero!
Let’s take a hypothetical situation. A seller lists his house on March 1st, 2008, and hopes to have it sold in a couple of weeks. Maybe he set the price too high or maybe buyers just don’t like his choice in paint color; but whatever the reason, the house isn’t sold by May. The “D.O.M” shows a whopping “60” and both the seller and the Realtor suspect that it’s just bad karma to show people how long the house has been rotting on the market. So, the listing is terminated, and a brand new listing comes out onto MLS…..for the exact same house.
Are they really fooling anybody? Maybe.
The “D.O.M.” starts fresh at zero, and anybody that missed the property the first time around says, “Oh, look at this lovely new listing.”
Of course, Realtors can always go back and check the history of a property, but maybe they are just too lazy. Maybe they don’t care. Or maybe a buyer receives an automated-email with the “new” listing and becomes interested.
Maybe this little trick actually works!
Check out this screenshot of the TorontoMLS home page:
You can see on the left-hand side where NEW listings and UPDATES are shown.
If you so much as change a simple typo in the text of the MLS Listing, it will appear under the “UPDATES” section. But for many people, updates just aren’t good enough, and they want their listing to show up under “NEW.” This is why the re-list came into play.
In the event of a price change, the listing will show up under UPDATES. But again, many Realtors aren’t satisfied with “just” a price drop, and so they re-list the property whether they drop the price or not.
So what is my point?
What don’t I like about this practice?
Well, it skews the statistics, and all the nay-sayers out there can make claims about the market that simply aren’t true.
For simplicity, assume in 2008 there were 100 houses listed for sale on MLS, and 75 of them sold.
We would have a sale-to-list ratio of 75%, and we could claim that supply vs. demand is very reasonable at 1.33. Keep in mind that you can never have more sales than properties listed!
Now assume that twenty of the properties listed were sitting on the market so long that the Realtors in charge decided to re-list the properties.
Now you have 120 listings even though there were really only 100 houses.
The sale-to-list ratio becomes 62.5%, and the supply vs. demand factor increases to 1.6.
See how the numbers have been completely skewed?
The Toronto Real Estate Board doesn’t differentiate between “new listings” and “total listings” since they just take each subsequent listing and throw it into the pot.
So the more Realtors who decide to re-list their properties, the worse the market looks through the use of the almighty statistic.
But I have another problem with this practice, and that is a theory that re-listing actually hurts the chances of a sale.
Let’s say you have a buyer looking for a bungalow in East York, and he’s very eager to buy. You find four suitable properties in the area which are all in his $450K – $500K price range, and one of those listings has been on the market for 115 days while the others are all less than two weeks old. The buyer and his agent should assume that the owner of the house that has been listed for 115 days is dealing from a point of weakness. The buyer may become more interested in that property simply because he thinks he has the upper hand.
But Realtors and their sellers have a major problem, and that problem is EGO!
They are both to proud to admit that the house isn’t selling, and isn’t getting showings. So they re-list the house, and the Days-On-Market starts again at zero.
But what the heck is wrong with showing weakness? Show your terrible grade-eight graduation photo if it will get you an offer on your property!
If the listing has been out for 115 days, a buyer might be more willing to make an offer because he may think you are more likely to sell, or maybe even more likely to come down on your price.
And if you’ve had your house listed for 115 days without a sale or even an offer, shouldn’t you try and entice a buyer any way you can?
If your house is listed on the market, in means, unequivocally, that you want to sell your house. So why hurt your chances of doing so? There are so-called “bargain-hunters” out there that search for stale listings, and maybe showing 115 days on the market will entice buyers to play ball.
Some of you may be thinking, “Why would I want to attract a bargain-hunter? I wouldn’t want to give my house away!” But if your house has been on the market for 115 days, you really aren’t in a position of strength, are you? Are you in any position to be choosy? And isn’t this somewhat of a buyers market now anyways?
I’m not talking about raising the white-flag and handing over the keys to your property, but I am talking about attracting buyers any way you can if your property isn’t selling. Re-listing the property at the same price just to get under the “NEW” listings section on MLS and have the Days-On-Market reset to zero is going to render your property just another overpriced listing.
Why not send out the message that you’re ready to play ball? Leave the listing as-is on MLS, and show people that you’ve been on the market a while, and it’s their move; the ball is in their court.
Every single day, I see more and more recycled listings on MLS and all that does is skew the statistics. I’ve seen Realtors re-list the same property every two weeks for four months, essentially meaning ONE property counts as EIGHT under the TREB statistics.
The media is lined up to throw out statistics showing that there are more listings this year than last year, or that the supply severely outstrips the demand.
Why is there a need to make numbers say anything you want when in practice, the work is already done for you?