Dear Monty column: Can real estate agents "game" the MLS system?
Columns share an author’s personal perspective.
Reader Question: Can real estate agents "game" the MLS system? When my current listing expires, how long do I need to wait to list again if I want my second listing to be marked "new" instead of "relist"?
Monty's Answer: There are over 700 multiple listing services (MLS) in the U.S., and they all operate independently. This structure means there may be more than one answer. The MLS I am familiar with will show your home as a new listing if you are switching brokers. The MLS will assign a unique ID code to the property. Many agents conduct MLS searches using the ID code. However, even if you switch brokers, when the property is searched for in the MLS by the street address, the entire history will display. There is no waiting period to consider in this decision. Switching brokers is what triggers the new ID code.
Reasons sellers seek "new listing" status
- There is statistical evidence that new listings get a spike in activity when coming on the market. When a new home becomes available, the existing "buyer pool" checks it out in the first few days.
- The second reason sellers seek the new listing status is to avoid informing new buyers coming into the market. Sellers, buyers and agents can incorrectly assume the new entrants will think there must be something wrong with the house and avoid pursuing it. While a valid concern, it is just as possible that prospective buyers will suspect the only thing wrong was too high a price. Check out the research on Dear Monty at bit.ly/2I2K9if.
"Gaming" the system
It is unethical to attempt to conceal time on the market. Even if a seller or agent conspires to do so, the jig will be up when the new owners meet their new neighbors. Consider interviewing several agents and asking them if there is a way to redact the MLS history, so it appears the property has not previously been for sale. You may get different responses. It can sometimes help you decide which agent not to pick. Some real estate agents will cave in or see no harm in the practice. I believe an ethical agent can succeed in explaining that only incorrect pricing was the culprit. The seller did not "lose" value they never had.
Other games some agents play
Richard Montgomery is the author of "House Money - An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home." He advocates industry reform and offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty, or at DearMonty.com