Wednesday, March 13, 2013
Where do these websites get their listings and how do they make money? They get most of their listings directly from the local MLS systems which give them free access to the data. They then repackage it and display on their sites. They generate revenue by selling advertising back to the listing agents and other advertisers. They justify their rates by number of page views. This is where the suspected deception comes in. It is in their best interest to have as many listings as possible to generate the most page views possible. New listings appear on these sites almost immediately. Sold or withdrawn listings can linger for years continuing to boost total page views which justifies advertising rates. Why is this? The same technology that puts a new listing up immediately should be removing the sold listings equally fast. By design? Your guess is as good as mine but where there's fire...
I received an email yesterday from someone interested in what appeared to be a "smoking deal" listing on one of these sites. The price was too good to be true. I immediately questioned it as I knew there hadn't been a listing in that complex near that price in years. Turns out that the condo was first listed on the MLS at $149,900 in December 2010 as a short sale. It went under contract in three days and came back on the market in June 2011 at $160,000, "bank-approved" price. Presumably that buyer walked at the $160,000 counter from the bank. It closed in August 2011 for $170,000. It is still on the offending site this morning showing up as a "featured" active listing asking $149,900. Also shows as being on the site for "180+" days. True that. Apparently they also have a sense of humor. It has generated 7154 page views, presumably almost all at a time that it wasn't available for sale as it was actually "on the market" for a total of six days.
I ask myself who is being harmed here. Certainly not the agents who are advertising on the sidebars of these deceptive listings. They probably have nothing to do with the listing status nor where their ads appear. They are getting emails and phone calls from consumers who believe these listings are real so they benefit. The websites benefit because they continue to generate ad income from the happy agents who are getting inquiries that they can steer on to other listings. I guess I'm concerned for nothing. The consumer eventually gets another property, the agents, advertisers and the website owners make more money and all that is wasted is a little time on the front end explaining away the loss-leader listings.
I guess what I'm really concerned about is the negative impact to the reputation of the entire real estate industry and my own by unfortunate association. Ours is not the best reputation for well-deserved reasons. With a burden of shenanigans during the boom years including NAR's self-serving "Time to buy" ads at the precise beginning of the crash, we don't need further hints to our possible dishonesty. All I can do is complain here publicly and conduct myself as my mother would approve.
Buyers, forget all websites for property searches other than the MLS itself. There you have full access to all listings and, surprise, they are updated in real time. That listing that I profiled above showed up on the MLS for exactly six days, the time that it was really for sale. Your link for all property searches is BrevardMLS.com Contact me if you find one that interests you and I'll fill in the blanks. Happy hunting.
"You can lead a horse to a picture of pretty water but you can't make him drink. You can however, get him to drink some not-as-pretty water if the first picture made him thirsty enough." __Larry