Touting a Secondary Area on MLS

Defining "Location"

One of the ways Twin Cities agents search for properties for their clients -- at least until the end of this year -- is by "MLS area."

So, "300" roughly corresponds to Lake of the Isles and Lake Calhoun; "391" to St. Louis Park; "309" to Southwest Minneapolis (Kingfield, Linden Hills, etc.); and "387" to Minnetonka. (Metro-wide, there are about 100 discrete MLS areas.)

One of the ways overly aggressive agents try to get attention for their listings is by "borrowing" the MLS area of an adjoining, more upscale area.

That's definitely a no-no.

Fortunately, however, there's a legitimate way to tout a nearby MLS area: list it as a "secondary area" (MLS has a field expressly for that purpose).

Experienced, local agents will already know which areas abut which -- but it never hurts to underscore it.

Realtor Whistle-Blower . . . or Tattle Tale?

Pushing the Boundaries -- Literally

What do you do when you see another Realtor break the rules (or appear to)?

And if you do something, does that make you a whistle blower -- or a tattle tale?

Thankfully, the issue doesn't come up that often. But it does come up.

Here are the three most common situations where rule-breaking arises:

One. A home sells with virtually no market exposure, at a giveaway price -- and here's the kicker -- the Buyer's agent is the same as the home owner's (called "single agent dual agency" -- see, "That Sure Went Fast! (Too Fast??)".

Two. The Realtor "borrows" the MLS area number from an adjoining, more upscale part of town.

So, instead of entering the code that includes Powderhorn Park, the listing agent codes the listing for Kingfield, on the other (west) side of 35W.

Three. The listing agent flagrantly overstates a home's finished square feet (funny, the opposite never seems to happen).

"Tattling" or "Keeping it Honest?"

So, to repeat, what do you do?

My answer depends on a couple factors: do I have a client interested in -- or competing with -- the home in question?

Is the agent with Edina Realty?

If it is, I know who to call (their office manager -- or mine). And it matters more, because bad behavior by another Edina agent reflects on me personally.

Could there be a benign explanation?

For example, maybe the agent who was on both sides of the "fire sale" had express permission from their client to sell it, fast, at the best price they could get (but usually you do that loudly, not quietly -- otherwise how do you know it's the best price??).

And last but not least: how busy am I at the moment?

In general, I don't view it as my role to police other Realtors' behavior or business practices.

However, when such behavior harms my or my clients' interests, I see it as my obligation to do something.

As Martha Stewart would put it, "that a good thing."

P.S.: I suppose that the contrary argument would be that sleazy Realtors make ethical ones look good by comparison -- and therefore actually help the latter.

Short Sale -- 1 Yr Anniversary

Where: 41xx Pillsbury Ave. South, in Minneapolis' Kingfield neighborhood

What: 3BR/1BA, two-story built in 1910. Condition: rough

How much: asking $155k

When: originally on market Aug, '08

Most homes, when they don't sell, eventually drop their price.

Not this one.

After coming on the market exactly one year(!) ago at $150k, the Seller raised their price this June, to $155k.

Why?

It's a short sale, unless the owner gets $155k.

Yup, after almost a year on the market, the asking price went up, presumably because the owner's mortgage balance did, too.

Which captures at least one of the problems with short sales in a nutshell:

Too often, the asking price has nothing to do with fair market value, and everything to do with what the Seller owes the bank(s).

(Another) Foreclosure Feeding Frenzy

Home Focus: 38xx Harriet Ave. (South Mpls.)

What: 2 BR/2 BA; 1,364 FSF in South Minneapolis' Kingfield neighborhood
When: On market 4/17/09; closed: late May
List Price: $75,000
Sold Price: $91,000
% Over List: 21%

This home sold for $91,000 -- a mere 21% over asking price. I was told that there were at least 8 offers on this home within 2 days.

Lots more of these deals are in the pipeline, because they came on the market earlier this Spring, and are just closing now.

Based on what I saw, I wouldn't be surprised to see at least a few bank-owned foreclosures that fetched 50% over asking price (imagine telling your client what the asking price is, then telling them what they likely have to bid to actually have a chance of getting the property).

I'm also hearing that Seller bad behavior is -- surprise, surprise -- begetting Buyer bad behavior: namely, the best way of winning one of these "real estate lotteries" is to buy lots of "tickets" (submit offers on multiple properties simultaneously).

As a consequence, the fall-through rate on these deals apparently is astronomical.