It’s almost enough to make you wonder if an ex-girlfriend is a real estate agent …
Peter Coy at Business Week, he of the psuedo-expose’ on MLS data manipulation (based on faulty information culled from a bubble blog and later pulled from the site) now is on the warpath about the Days on Market field in most Multiple Listing Services.
The crime? Agents manipulating the data by canceling and re-entering listings into the system in areas where the system still allows, or agents using a variety of techniques to circumvent the Cumulative Days on Market field on systems with that data field.
(Quick note: Phoenix’s MLS – the Arizona Regional Mulitple Listing System – falls into the latter category. Any listing will accumulate cumulative days on market unless it has been 90 days since the previous listing expired. Most attempts to circumvent are caught – usually by the agent who previously owned the listing.)
At least this time Peter has uncovered a real issue, though it best can be described as a mountain being created from a mole’s dwelling. Too busy quoting bubble posts about real estate agents duping the public, Peter missed the larger issue – at what point did days on market become a material fact about a home?
This isn’t to say DOM can’t be a material fact to a buyer. Hell, I’ve seen almost anything you can imagine become a material fact to a buyer. But a material fact about the home? Nonsense.
- If a seller demands too high a list price and the home languishes on the market, is the days on market due to an issue with the home or with the seller?
- If a listing agent purchases a listing by offering false hope and an inflated list price, is the days on market due to an issue with the home or with the listing agent?
- If there are a dozen equivalent homes in the area, not due to anything in the area but just the general glut of homes, is the days on market due to an issue with the home or with the market?
As I’ve argued previously, Days on Market is one of the most over-hyped and ultimately useless statistics available about a property. About the only useful facet of the Days on Market count is perceived desperation/flexibility on the seller’s part as buyers determine what price to offer for a home.
Cumulative days on market also serves to stigmatize a property, but no one seems to care a great deal about a lowly seller. Apparently, they are second-class citizens in the real estate world.
Peter calls this a hot-button issue for consumers and agents. I can’t speak for consumers or for my brethren. But for myself, should I have a buyer who considers days on market to be a material fact, it’s not a particularly difficult exercise to determine the truth.
Frank Borges covers this on his FranklyRealty blog in a two–part post. Aside from showing the basic methods of manipulating the data, Frank raises an excellent point … if you’re working with an agent who can’t figure out how to determine the true days on market, you may be working with the wrong agent.
At least the actual Business Week article was more consumer oriented and contained less finger-wagging at the real estate set.
Oh well … now that this has been covered, maybe Peter will post whatever truth he found about the alleged December data swings. It’s only been about three weeks so far …