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.
“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
Misleading a potential buyer or other agents with time on the market is one trick. So, can real estate agents “game” the MLS system? There are many different ways a real estate agent can trick a customer using the MLS. Here is a link to a real estate agent article titled Top 10 Dirty Tricks Used by Real Estate Agents. There are excellent real estate agents. It can be challenging to distinguish the good agents because the bad agents described in the agent section of the National Association of Realtors Danger Report mimic the good agents. Some of the tricks are invisible to the consumer because the agent is the filter to accurate MLS data. The customer is often not familiar enough with how the MLS works to ask the right questions.