Written by Jim the Realtor

May 20, 2010

We’ve mentioned before the brazen attitude of the realtors who sandbag their short sales until approved or ready to close, and then input them on the MLS for all to see. 

Apparently it never occurs to them that they are displaying all the incriminating evidence, let alone tanking the comps for the rest of the neighborhood with un-tested (not on open market) sales prices. They must not think anything is wrong – heck everyone else is doing it!

I see two or three of these every day in North SD County Coastal:

31 Comments

  1. Jim the Realtor

    Buyers should rejoice because these are better than actual price discovery – they could be overshoots, but who knows?

    But they are real comps, because they go undetected – they just look like another sale, except to those who are paying attention.

    How to spot them?

    The MLS has two DOM trackers but one of them is screwed up, and they don’t track contingents at all, so the DOM counts are unreliable.

    Telltale signs: at least half of them have no remarks, no showing instructions, and most have few or no photos. Almost all are short sales, and in most cases the listing agent represents both buyer and seller.

  2. CA renter

    Yes, we’re happy about the comps. Still, it would be nice to have a market that is free of “games” for a change.

    Thanks, Jim!

  3. Jeeman

    Well, those balloons place what time you were over there…around 6:45p. That one with the stars and the crescent moon flew by overhead.

    That place is a bomber, and definitely a deal. With an ocean view, the buyer is making out like a bandit.

  4. Sol

    Agent’s commission playing a role in the short sale game?

  5. genius

    I’m glad someone has the kajonas to show all the fraud that is going on.

  6. Art Eclectic

    “Still, it would be nice to have a market that is free of “games” for a change.”

    Maybe I’ve just become a permanent pessimist, but I don’t see that ever happening. There are more and more people all the time subscribing to the “get rich, fast, by any means possible” philosophy and they have gravitated towards the FIRE sector as the one with the least regulation and therefor the greatest potential for making a fast buck.

    As job options become thin and wages stagnate, people who want to improve their standard of living will be increasingly drawn to “opportunities” to achieve their goal. We live in a bubble society now and a class of people have learned to make their living off of it. I can’t say as I blame them because it is pretty clear that our government and the FED have no intention of dampening the permanent bubble economy we now find ourselves in.

  7. clearfund

    JTR – To be clear relative to values/comps, Del Rayo is in general RSF, however, it is NOT part of the Covenant (unlike Jeeman’s property which is inside the RSF Covenant).

    For those not intimately familiar with RSF, this is a significant difference in values, resale, prestige, RSF Golf Club membership opportunity, etc.

  8. Jim the Realtor

    Agreed, Del Rayo isn’t even Baja Fairbanks, it feels more like Vista.

  9. Jinx

    The Meadowgreen Ct. listing in Encinitas REALLY ticks me off because it’s with “Trinity Home & Investments”. They had another listing like this that came on the market marked as pending (1428 Kings Cross, Cardiff) and is still on the market as contingent. Do any of their listings close? Or are the banks smarter than that?

  10. FirstTimeRenter

    Baja Fairbanks or no, I’ll take that new comp.

  11. Jim the Realtor

    Me too, it’s a little scruffy now but in a few years you could see more new big bombers built all around you (one in process now). Convenient location too.

  12. justme

    Ok, so for the alternative MLS system, we need ghost busters capability to detect and destroy fraud.

    Add to my resource needs a business model that makes eliminating fraud profitable.

    Who you gonna call

  13. shadash

    justme,

    You don’t need ghostbusters capability to detect and destroy fraud. You just need a police force that’s not as STUPID as the one we have in SD. You get 20 years for stealing $300 from a convenience store. You *might* get a fine of $500 for the fraud that Jim is highlighting. (which easily banks over 10-20k) And the fine would be from from the MLS not any government agency!

    It’s a sad truth that real estate scammers can generally get away with whatever they want in todays market. Which is weird because I thought after the bubble popped the amount of fraud would go down.

  14. justme

    shadash – righto. no detection needed. just need a business model then that allows for profitable destruction of real estate maggots. while it would be fun game hunting to endeavor a search and destroy mission, interest is likely unsustainable without $$ bounty.

    Jim.The.Realestate.Detective, thanks for the video entertainment today and everyday.

  15. Genius

    #6 is a fraud. Time for me to find a new handle.

  16. 3rd Generation

    Green Shoots! Rejoice!

  17. justme

    #16 you can borrow mine anytime. might be too humble for your liking.

  18. Jeeman

    shadash,

    They say the “pen is mightier than the sword”, and it’s less risky too.

  19. Jeeman

    “Please request more information from broker”

    LOL…The shorter the description, the more likely they aren’t trying to attract buyers. Either they got their buyer, or they don’t want to sell the house.

  20. Jim the Realtor

    but I don’t see that ever happening

    Me neither, and the fraud will probably increase because it’s so easy to get away with it. It’s so prevalent that the agents who are doing it think that it is standard business practice.

    A new public MLS with a ebay-like feature to rate the performance of agents would solve it though.

    But our association of realtors is too busy merging. I gave them the idea 3-4 years ago, yet they can’t even generate a public MLS, let alone anything powerful or effective.

  21. clearfund

    Remember, the Association’s business is not real estate, it is dues collection. Like a union that you have no choice but to join. They get no cut on transaction values…just risk free monthly dues.

    Its like the day I realized the business model of my agent was NOT to get the highest priced home, but to sell it for whatever price and move fast to get her the best $/time. Her, motivation is not the same as the sellers..who cares if they get $3mm for a home or $2.7mm for a home, its within 10% right…but that $300k was my entire profit!! They make their money on the first $2.5mm, the last $500k is just pennies compared to the $2.5mm.

    I’d like to see a sliding scale commission. The closer you get to the listing price the higher the percentage you get. If you slide down too far then your percentace drops 4,3,2,1,0…if you surpass your recommended listing price then I’d pay you a big chunk of the excess 10%, 20% who cares, its unexpected gravy.

    Nah, thats crazy…

  22. CA renter

    As job options become thin and wages stagnate, people who want to improve their standard of living will be increasingly drawn to “opportunities” to achieve their goal. We live in a bubble society now and a class of people have learned to make their living off of it. I can’t say as I blame them because it is pretty clear that our government and the FED have no intention of dampening the permanent bubble economy we now find ourselves in.

    Art Eclectic | May 21st, 2010 at 6:36 am
    ————–

    Yes, you’re exactly right about what caused the bubbles, IMHO.

    The working people have been treated as though they are the parasites (lower taxes for the wealthy, anti-union, anti-protections/regulations for workers, pro-globalization/importation of cheap labor, etc.), when in reality, it’s the capitalists (gamblers) who are the parasites. IMHO, this is one of the signs of a dying empire.

  23. osidebuyer

    re #22 clearfund you may be onto something there, assuming the seller sets a realistic price…

  24. Jeeman

    Do you guys think there is a market for a business that will create a more open MLS system? Kind of like a competing MLS where no information is “private” to the eyes of the agent?

  25. CA renter

    Jeeman,

    YES! If it’s done right, an open MLS system would blow away the existing MLS cartel, and would change the way RE is transacted, IMHO.

  26. Genius

    Re: Jeeman and CA renter
    It wouldn’t be hard to start. All it would take is one motivated programmer and a web/dbase server to get things off the ground.

  27. clearfund

    Osidebuyer – I would envision a price set in mutual agreement between the seller and the agent. The agent needs to propose a number that is attainable, and the seller needs to do the same.

    If they can both reach a mutual agreement then the sliding scale seems equitable for both parties.

    In my commercial partnerships, we get an outsized share of any proceeds above our investors/our mutual return minimums. Everybody is happy.

    If we don’t perform our fees are barely enough to pay the rent and utilities. Makes you very focused on getting your research/assumptions/pricing figured out early.

  28. tj & the bear

    It wouldn’t be hard to start.

    The technical aspects aren’t the issue, as there are already plenty of RE websites. What you need is some “incentive”, financial or (more likely) legal, to get the industry to change.

    Given how powerful the RE related lobbies are I’d say that’s a tall order.

  29. Jeeman

    FSBO websites are kind of an “open MLS”, but they haven’t taken off too much. But I think Jim would know better. It’s a chicken and the egg problem…buyers won’t look at it unless there are listings, and sellers/realtors won’t pay to post unless there are enough buyers to make it worth it.

  30. CA renter

    That’s pretty much the problem, Jeeman.

    Jim and I have discussed this open MLS concept in the past, but it was difficult to come up with something that was so exceptional, everyone would want to use it right away.

    When Zillow came out, I was hoping they would move in the direction of an open MLS, with all the relevant public information on the same site, but for some reason, they didn’t really run with the concept when they were fresh and everyone was looking for a new leader.

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