Andrew Wetzel's Musings

November 2, 2019

Bright MLS Listing Statuses and What They Mean

There are two primary tools used for conveying property information for buying and selling Real Estate.  While there are literally hundreds of possible ways to communicate this information, except for specific market segments which may use or need a different approach, all but the top two pale in comparison as far as efficiency and effectiveness.  Real Estate agents are the “match makers” bringing sellers and buyers together:  we participate in over 91% of Real Estate transactions.

By efficiency I mean having the ability to mass market information as quickly as possible.  Marketing means exposure and exposure should ensure that a seller achieve the highest possible selling price in a reasonable amount of time.  Whether the value the market attaches to a property meets the seller’s expectations or not is another story.  The fact is that Real Estate needs to be exposed to the mass market, properties have to be available to be shown to prospective buyers and sellers need to believe that the value they are offered has not been negatively impacted by poor or limited exposure.  Sellers are either motivated by time or money so some may be willing to settle for less if they sell quickly.

By effective I mean that prospective buyers and their agents must be able to readily identify all of the options which meet the buyer’s wants and needs.  Buyers need to be able to believe that they are getting the best value for their dollar by being able to compare what is available for purchase and to compare what is available with what has been sold as far as location, features, condition and price.  The concept of “data integrity” means that information is uploaded accurately so that it can be identified by people searching for it.  Of course, listing agents and mortgage appraisers need to rely on the information as well.  No one benefits from inefficient or ineffective means of conveying Real Estate information.

So, what are the two tools?  They are the multiple listing service and the Internet.  Agents use the MLS to research the market, to offer their listings to the masses and to attach a “range of values” to what they are hired to sell as listing or buying agents.  While often not a direct link, generally what is uploaded to the MLS is “syndicated” to the third-party public-facing websites on the Internet.  While information can be placed on the Internet beyond what the MLS offers or without any placement in the MLS, the Internet has its own limitations.  For example, while it provides lots of data and information, it is a static medium which cannot provide the knowledge and insight an agent can.  It also cannot provide up-to-the-minute access to property listings or information about recently settled properties.  As an example, most people understand that the “valuation” models provided by Internet sites are unreliable even if they do not know that the lack of real-time information is a major reason for that.

My point is not to compare the two media although there are significant differences.  The public should not assume that they can “shop online” for property and Real Estate information, delay contacting an experienced, trained, educated and knowledgeable professional and still expect the best possible outcome.  Buying and selling Real Estate are too important and too many are ill-equipped for the process and the decisions that typically will follow.  Both media, while different, need to rely on “data integrity”, meaning that anyone who finds “information” on either platform should be able to trust that it is valid and that is the problem.

One major point of focus is the “listing status” of the property so I will discuss the different MLS statuses and give a brief description.  It has been my experience that some agents and many consumers do not clearly understand what these terms mean.  Misinformation can be costly given that the sale or purchase of Real Estate is typically the most expensive financial transaction a consumer will make.  The cost of mistakes can be high with little chance to recover lost opportunity.  Now, the statuses.

Active:  means that a property is available for showings and for purchase.  This seems simple enough but Bright has a 3-business day rule meaning that status changes, including price changes, must be reported within 3 business days with the date of the “change” counting as day #1.  Good agents will verify the listing status before showing a property or writing an offer.  Failure to comply with the rule may violate rules and regulations;

Active Under Contract:  means that there is an executed purchase agreement but the property is still available for showings.  The real question is why?  Does the seller have the right to terminate the existing contract or are they just looking for “back-up” offers in case something happens?  Whichever is the case should be obvious.  Good agents will ask questions.  The key point here is that showings must be allowed;

Canceled:  means that the listing contract has been canceled;

Closed:  also called “settled”, means that the sale or lease has been finalized;

Coming Soon:  means that the property is not available for showings but listing agents must respond to inquiries whether the property is the MLS or not.  This is a current “hot topic” which is still evolving;

Expired:  means that the listing contract term has run out without a sale;

Temporarily Off Market:  means that showings have been stopped and will resume at some point.  There are no showings but offers can be submitted;

Pending:  means that the property is “under contract” or sold but not settled.  No further showings will be scheduled;

Withdrawn:  means that the marketing has stopped but the listing contract still binds the seller to the listing broker.  The seller may still be interested in receiving offers but there are now showings.

Agents and the public must understand what the different statuses mean and agents must use them properly.  Few things frustrate a prospective buyer more than feeling that they are being excluded from a property especially if they think that the listing agent is the cause.  Our REALTOR Code of Ethics requires that we protect and promote the interests of our client and be honest with the public.  Failure to do either can and has hurt how we are perceived.  Sellers and buyers should feel comfortable asking questions about the process and deserve to be given honest and complete answers.

There is no time for inexperience, empty promises or false expectations!

 HIRE WISELY:  We are not all the same!

October 22, 2019

New Bright MLS Listing Policy (October 2019)

This week Bright MLS announced a new policy regarding property listings that are “advertised”.  The policy begins with the following language:

“The MLS system encourages competition in the marketplace while also ensuring cooperation and compensation among real estate professionals.  Full participation in the MLS ensures the seller has the largest possible marketplace, and the buyer has the widest possible selection.  This policy will help provide transparency and access to information in the real estate marketplace”. 

The reaction on Facebook was as swift and voluminous as I have ever seen in my years of engaging in social media.  I called the response “nuclear”.  While many, including myself, agree with the thought behind the policy change, a majority found it objectionable, questioning the ability of the MLS to interfere with how they conduct their business.  Let me add some history and context to the situation.

Bright was formed in 2018 by the merger of multiple MLS systems.  It covers several mid-Atlantic states and serves almost 100,000 Real Estate licensees.  Before Bright, our local MLS was called Trend and it served about 30,000 agents.  Until this new policy, there was a “3-day rule” that stated that any change in the status of any property had to be reported to MLS membership within 3 business days.  It excluded weekends and national holidays and the date the change was made counted as the first day.  The changes included new listings taken, price reductions and status changes.  The rationale was transparency.  The rule still applies with the one exception covered by the new policy.

For sellers, it encouraged full-market exposure for their properties which should result in more competition and the sellers attaining the highest value.  For buyers, it meant they could access all property listings that matched what they were looking for so that they could make an offer knowing they had considered of all their options.  For agents and their clients it meant having the ability to evaluate the market for comparing and attaching values to properties offered for sale.  All that being said, allowing 3 business days created problems even when agents complied with the rule.  What could happen in 3 business days?

New listings could be shared with segments of the market before receiving full exposure.  Sellers might not get the benefit of full competition.  Buyers might put a house under contract without seeing all of the possibilities.  Agents might show houses that were already “under contract”.  Will any rule change any of these?  Probably not but trying to minimize the problems we have dealt with might add to market efficiency and effectiveness and enhance our image as professionals.  One can only hope!

In my various roles in addition to listing and selling houses, I have heard many complaints over the years from agents unable to get information about houses not yet uploaded to the MLS.  Their buyers saw “For Sale” signs and some information online and wondered why their agent was unable to provide additional information they needed to make an informed decision about property.  Even if the information is in the MLS, some listing agents are the point of contact for scheduling showing appointments and some do not respond to inquiries in a timely manner but that is a separate issue.  What good can come from keeping property information secret?  The general presumption is often that these listing agents do not want competition and that they are trying to sell their own listings.  That may or may not be fair but their actions create those feelings and those perceptions taint all agents.

Here is the new policy:   Within one business day of marketing a property to the public, the Participant must submit the listing to Bright MLS for cooperation with other Bright MLS Participants.”

Let’s break this down.  “One business day” apparently means 24 business hours.  I would prefer that it really meant a “business day” as that is easier to monitor.  “Marketing” should be easy to define but it apparently isn’t.  For example, putting up a “For Sale” sign or uploading property information to the Internet is considered marketing but, as was explained in a Bright MLS video intended to clarify the new policy, “marketing” in emails seems to be correlated with how many people are included in the communication which makes this awkward to say the least.  I like definitive rules and regulations.  Regardless, I believe the intent is good and, if followed, will allow agents to answer questions about price and features and should help the overall Real Estate experience.

I have followed the developing reactions online and have read a number of reasons why some agents seem to feel this new policy is wrong.  One specific concern that makes sense is that agents who use a third-party to install their “For Sale” signs may not know exactly when the sign has been installed.  The easy answer is to upload the listing to the MLS before placing the sign order.  Frankly, while I am certain that some agents have valid concerns that needed to be discussed and addressed, most of what I have read seems to be complaints that some listing agents will not be able to control activity which makes me wonder whose interest they are serving.  A number have mentioned wanting to restrict needless showings to minimize their clients’ inconvenience.  I wonder how they do that while complying with the various laws affecting Real Estate.  Frankly, I empathize with the thought but, as I have opined before, this is not a retail transaction:  showings are generally required to allow buyers and agents to assess Real Estate and they will be inconvenient but that  inconvenience will end once an agreement is signed.  Trying to manage showings and control the marketing might make people wonder who is being restricted from viewing a property and what the real intent might be.

I saw one interesting comment from a buyer’s agent:  they said they had a client who wanted to buy a house that had not been in the MLS or on the Internet to avoid any privacy issues after settlement.  Again I empathize:  listed properties stay online after the sale closes or after the house is taken off the market and anyone can see interior photos even if they reflect prior ownership.  The Internet has affected privacy and I am not sure how to change that.  In my opinion, only active and available properties should be online and properties that sell or come off the market should be removed.

Time will tell if this new policy works.  Will it be modified?  Will deviation be allowed?  What will happen to those who violate it?  There is a heavy fine proposed for non-compliance.

As an experienced, educated and knowledgeable professional, I embrace the efficiency of the MLS.  Prior to our having an MLS, trying to get property information out to the broad a market was tedious, time-consuming and expensive because it was so inefficient.  As someone who bought a personal residence prior to there being an MLS, I remember all too well the hardship we faced identifying every possibility to consider.

Buying and selling Real Estate are infrequent acts that typically involve our biggest asset so the processes deserve all the attention and respect we can give them.  Article 1 of our Code of Ethics requires us to promote and protect the best interest of our client above all else.  While some may think that that means keeping information off the MLS, my best guess is that an overwhelming majority benefit by getting information published as quickly as possible.  We need to make sure our clients fully understand the benefits of using the MLS and our services even if that means we lose a little control.  I certainly hope that it isn’t all about the commission!

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

August 30, 2019

Have You Really Decided Not to Sell Your House?

I have been helping frustrated owners sell properties that other agents could not sell since 1996.  What does this mean?  I use the multiple listing service to monitor daily residential and multi-family properties.  I look for property listings that might appeal to my buyer-clients, that compete with properties owned by my seller-clients and those which come off the active market without selling.

During the course of any year a number of property listings are canceled or their contracts expire before there is a sale.  Some of these properties will come back on the market with the same agent, perhaps at a lower price, some owners will hire a new agent thinking that will solve any problems they had and a significant number of properties will remain off the market for months or longer!  I always wonder what happened with whatever plans those owners and families had.

While some owners may resort to renting their houses so they can move, many seem to either give up or delay their plans, perhaps waiting for what they think is a better time to sell.  Those looking to buy another home need to know how waiting will affect a purchase.  Either way, the fact is that buyers look at houses all year long and they can only see and buy properties that are on the active market so waiting to try again may be counter-productive, especially in areas that tend to move more slowly.

I understand and empathize with people who feel frustrated by the harsh reality of the Real Estate market.  Any optimism they felt can lead to frustration:  why aren’t people coming to see their house?  Perhaps they had many showings but no one made a good offer.  Many probably wish that family, friends and neighbors would stop asking them questions.  I do have one serious question:  what happens if you do not sell?  If anyone really wants or needs to sell, why not restart the process now or start planning for next year?

I am a full-time agent, a REALTOR®, an Associate Broker, an Ethics Instructor and a Mediator.  I have listed and sold Real Estate in Delaware, Montgomery and Chester Counties and in Philadelphia.  Many properties that sell were “previously listed” and most of them sold only after something was changed with the way they were being marketedPrice is not always the issue.  In fact, many sellers take unnecessary reductions.  For anypreviously listed” property to sell, something must change.

The most effective choices are marketing (meaning “exposure” or awareness of your property: your MLS sheet is your property resume.  How accurately did it represent what you were selling?), pricing strategically and/ or hiring a different agent.  Changing agents can bring a new perspective and a different philosophy that might provide the advantage you need in a competitive market.  What would your last agent do differently this time (other than a price reduction)?  Will doing the same thing over again even with a new agent produce a different result?  Change for the sake of change can be a mistake.  You may be adding days on the market without increasing your odds for success.

Why should you call me?  My background in Client Service Management combined with my Real Estate experience, training, education and knowledge will help me to assist you.  Real Estate is not “rocket science” but it requires a thorough knowledge of the “process” and a proven strategy.  I have a common sense, client-centered approach.  You can learn more about me by listening to my podcasts, reading my blog and by visiting my website.  I have a lot of material available.

Effective marketing allows buyers and agents to find properties like yours in their search results (think “Google search”).  If they could not find your property in their searches, the odds were against you perhaps causing your property to sit on the market!  Many sellers are asked to reduce their price (and their proceeds!) when marketing was THE real problem.  Reducing the price will NOT always solve a marketing problem.  I NEVER ask for a price reduction without justifying it.  Every house has a price at which it will sell; my job is to get my clients the highest price possible.

If I earn the opportunity to work for you, you will receive the highest quality service, attention to detail and effort.  Communication is critical:  my job is to keep you informed so that you can make the best decisions.  Most of my clients never had any ongoing contact with their agent!  I work for my clients.  In addition, I offer the following guarantee that I will do what I promise:  if I don’t, call me to discuss your concerns.  If I cannot satisfy you, you may cancel our listing contract unless your property is under contract with a buyer!

Thank you as always for taking the time to read my blog and/ or listen to this podcast.  Please contact me if you would like to discuss this further.

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

April 24, 2019

Why is the Initial Marketing Time so Critical?

Your house just hit the market after weeks of planning and cleaning and dreaming about how it would all turn out!  Would you get full price, any unusual requests or conditions, would you be able to find a new home that made leaving your present home easier to handle?  Everything seemed possible.

Then NOTHING HAPPENED!  The market essentially yawned.  What does this mean?

Even though getting your home on the market created so much anticipation and disruption in your life, let’s look at the other side of the equation.  You dipped your toe into an already churning market with however many prospective buyers already looking and evaluating and making decisions.  Whether you are in a buyer’s market or a seller’s market, there is a good chance that you will not see every prospect looking for a house like yours but you would like to see as many as possible.  Of course there is no way to know how many are looking right now so let’s take a broader look at what is possible.

How many buyers will enter the market tomorrow?  How many have already decided to make an offer on a specific house or are currently negotiating one?  How many have given up, deciding to wait for whatever reason?  You may be able to appeal to any of these, including buyers already “under contract”, as long as they like what you have and they have a way to end their current process.  However, your listing MUST be able to be found in their search results or they will not even know it is For Sale.

Let’s go back to my original point.  I would argue that the current number of prospective buyers is greater than the number who will enter the market in the next few weeks.  So, if none of them makes an offer, what do you do?  Perhaps some will come to see your house and do nothing.  They could change their mind later if they were getting their finances in order and/ or evaluating the overall market before taking action.  Or not.  Perhaps one of more will make overtures that could become promising if your agent knows how to handle that opportunity.  Or not.  The real question is how long do you wait before taking action to increase your odds for succeeding?

You can wait for the market to re-form or you could attempt to hook a buyer already looking but not committed to a house.  How do you do that?  If you are satisfied that your house is being properly marketed, meaning that, other than the price, it will come out in the proper search results, the price has to be a concern.  If you think that your competition has more to offer than your house you could wait until they all get contracts.  Of course, new competition will present itself.  It always does.

Patience is a wonderful thing and I respect sellers who are patient but, at some point, unless a seller decides to remain in their present home, something has to change.  You cannot keep doing the same thing over and over and over again.  A seller has two controllable variables:  the agent they hire and their asking price.  Sometimes changing agents is good as it provides a different perspective.  Changing your price requires a strategy and it may affect your overall plan, especially if you are buying another house.

A price reduction has to accomplish one of two things:  it either has to motivate a buyer who knows about your house but has not made an offer OR it has to re-position your house to a new group of buyers.  Pricing is important and taking a reduction just for the sake of taking one, especially if marketing is THE real problem, only serves to lower your proceeds and perhaps impact your options.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

March 25, 2019

Data Integrity: How Accurate is/ was your Property Listing?

Filed under: Buying,Ethics,Hiring an agent,Marketing,Price,Selling,Technology — awetzel @ 5:42 PM

What is “data integrity”?  It means that the data we collect, store and report is accurate.  What do I mean by data?  It could be the status of a property listing (is it available to see and buy? Has it been put under contract?  Has it settled?), the price, the type of property and its features.  I want to relate the importance of accurate data to three different groups of people, all part of a sale.

Let’s start with buyers.  A seller needs a “ready, willing and able” buyer to complete a sale.  Whether a buyer hires an agent to search the MLS or they search online, the expectation is that properties matching what the buyer is looking for will appear in their search results so they can evaluate whether to take the next step or they will not know a house is even available to consider.  If they cannot find it in their search results, they will not see it and they will not buy it.  Even worse, a listing agent may not know there is a fixable error and ask the seller for what may be an unnecessary price reduction which reduces their proceeds and still not make it any easier to find the property in search results.  I have many examples and will share two.

  • Early in my career a buyer identified two possible elementary schools for her daughters to attend. She drove the neighborhood and found a “For Sale” sign on a house, called me for information about the house and asked me to search the area for homes like the one she was fortunate to find.  I found several other houses for the family to consider but the one she saw was not in my search results.  The listing agent had entered the wrong zip code.  Imagine if she had not seen the yard sign and the house had remained on the market unsold.  She would have missed seeing the house they bought and the sellers may have been asked to lower their price.  By the way, the family is in the same house many years later;
  • A frustrated seller called me. His property had been on the market recently and his listing contract expired without a sale.  He called me to see what I could suggest.  I looked up the property, discussed it with him and quickly found a major error:  the MLS showed the house as having a single bathroom.  He said it had two full baths.  People searching for two full baths did not know his house was available even after he reduced his asking price.  This is sad and avoidable.

In addition to limiting the number of available houses for buyers to consider, which could lead to a buyer not seeing their best options, errors will affect a market analysis.  Buyers usually want to know what comparable houses have been selling for before they make an offer.  Houses that are not accurately listed as well as those whose statuses are not correct could impact a buyer’s perception of what to offer, perhaps causing them to lose a sale.

Similarly, a seller looking to price their house according to its location, features and condition may be relying on incorrect or incomplete information.  Their house could sit on the market unsold or they could accept less than they should have.  Over the years I have seen a number of houses not properly reported as being sold.  Instead, the listing contract expired or the agent withdrew it from the market making it look like the property did not sell which is often interpreted as meaning that the price was too high.

The last person this misinformation can impact is the appraiser.  They evaluate selling prices based on reported comparable sales.  They can only rely on what is reported even if it is inaccurate (how would they know?).  In addition to the status, appraisers rely on pictures, features and the public remarks to try to identify the prior sales most like the house they are appraising.  What is the cost of inaccurate information?  If it falsely appears that a buyer paid too much, the process may stop unless the seller lowers their asking price OR the buyer comes up with more money OR they somehow work it out.  Mortgages are based on a percentage of the appraised value so errors matter.

To conclude, data integrity is a BIG deal.  Many of my seller clients were unsuccessful with one or more agents before we met.  Many of their property listings contained at least one error and there were often errors serious enough to prevent a sale.  In many cases I was able to improve their chances simply by adjusting the marketing to enable potential buyers and their agents to actually find their property in their search results.  It is like a “Google search”:  how many inaccurate entries do you see before getting the result you were looking for?  You may give up or never find the best answer for your search.

Today many buyers start their searches on the Internet before contacting an agent which only magnifies the potential damage as they may not be as proficient identifying listings as a professional is.  People rely on our training and our experience which is why a higher percentage of consumers use our services than ever before.  I do not mean this to sound like a commercial but this is what we do.

Of course there are times when price may still be an issue especially if the length of time on the market needlessly scares buyers into thinking there is something wrong with a house.  Either way, a seller should not have to suffer a financial loss because their agent failed to do their job.  In  addition, many of my clients say that they never saw their MLS sheet with a prior agent or searched online to see how their property information looked, if it was even there.  Some said that their agent never gave them a copy of their printout and that may be true as I suspect that many know they have not generated a good listing printout.  Many listing printouts, in addition to being incomplete as far as features, lack pictures or offer only a few bad ones, some taken with cell phones, and have no public remarks section or have a poorly written remarks section that is boring, incomplete or loaded with bad spelling and poor grammar making them hard to read.

The MLS syndicates the information on your listing printout to the major search engines we all know as well as thousands of others.  If the MLS is not done well this only magnifies the problem:  “garbage in; garbage out”.  Your printout is literally like a resume.  So, unless your house is on a well-traveled street exposing your “For Sale” sign to lots of traffic, the MLS and Internet may be the only ways anyone will know you want to sell.  Does that make you feel comfortable?  What is the cost of delaying your plans or being asked to accept less money than you should?  What does your printout look like?

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

Technology and Real Estate

Gordon Gecko might say “technology is good” but Dirty Harry Callahan would add (paraphrasing for effect) that humans have to understand its limitations!

In the 1970’s I was fascinated with Texas Instruments calculators.  They quickly went from very basic to very complicated.  Just look at a modern-day financial calculator!  Today many of us seem unable do simple math without a calculator.  In the 1980’s I was fascinated with dial-up modems and being able to send and receive email.  Then I was introduced to Lotus 1-2-3 and Symphony.  Wow!  In the 1990’s I got my first home computer.  It had a huge storage capacity of 8 megs (yes, I said megs!) and enabled me to set up a spreadsheet for a pool team I ran.  I could also word process a weekly newsletter for my team.

In 1996 I became a Real Estate agent.  The industry was evolving from what the more experienced agents call “the books” for distributing information about property listings to Internet-connected computers running on 3.5″ disks.  Until that change, property listings were collected and disseminated to offices and agents in books every couple of weeks and manually searching for listings and comparable sales was time consuming and inexact to say the least.  The data was beyond stale when received.  It was a major achievement to be able to access information about property listings online and then in our homes!  OOOH!

The Real Estate world shifted monumentally in the new century as the public was allowed to peer behind the curtain and get property listings in their homes and businesses, allowing them to bypass over a million trained agents who had controlled the data since the first cave dweller decided to relocate.  Over time, while the data was limited to active, coming soon and under contract listings, third-party web sites began using valuation models to help buyers and sellers “understand” the financial landscape better.  At least that was what they were told.  There is so much more to say about that but I want to focus on technology and how it has inserted itself into Real Estate.

Seth Godin recently blogged about the evolution of technology and he accurately describes the first three cycles, stating the we are now in the fourth.  However, at least as far as Real Estate is concerned, the fourth, while on the horizon, is far from settled.  Sure, we saw a computer beat a Grand Master in chess and win on Jeopardy BUT they have not come close to perfecting a self-driving car and the track record with predicting home values is pathetic.

So, while many of us will continue to love and embrace technology, with many being “early adopters”, I would respectfully encourage my fellow humans to engage with professionals when it comes to Real Estate.  Buying and selling is not so easily predictive as answering a question, creating a question when offered an answer or even moving chess pieces and predicting the outcome of a head-to-head chess match.  There is no doubt that computers can do a seemingly endless array of lengthy calculations faster than we can blink or access a history of information if entered and stored properly but, can computers act illogically or emotionally?  Buying and selling Real Estate are emotional decisions justified with logic.  It is one thing to provide quick access to property listings and then to try to display comparable sales history to evaluate but it is quite another to create and present a purchase offer and then negotiate what may be many steps to make sure that both parties remain committed to completing a sale.  This is not a retail transaction!

Technology certainly has its place and there is no going back in time.  The critical factor is knowing its value, its limitations and where it fits into the process.  Information and data are not the same as knowledge and insight!

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

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