Typically, a new home listing gets a flurry of activity as real estate agents and the general public swarm in to take a look. If that home is still on the market after too long a time, it becomes “stale” and the market loses interest in it. There are several reasons why that home may not have sold yet, but often it boils down to being priced too high: no matter what “defects” a home may have — typically poor location and/or condition — it will sell if the price is right. The problem is, once a home becomes stale, it acquires a stigma, and even agents who haven’t seen it assume there must be something fundamentally wrong with it — $35,000 in termite damage, perhaps? Awkward layout? Dead skunk in the living room? The standard solution in our area involves three steps:

• First, an awkward conversation between the seller and the agent that starts with, “I think the market may be telling us we’re overpriced” (a message no seller likes to hear).
• Then, if needed, a quick property facelift — a new paint job, maybe some improved staging, maybe taking that dead skunk out.
• Finally, a bit of “relisting” magic…the property disappears from the MLS for a few days, then is reincarnated a few days later with a new price and a new MLS number.

While this little trick sometimes works wonders for getting the property sold, it can be confusing for the agent community and the general public. Is this really a new listing? Do I recall having seen it before? Has anything changed about it? It also skews one of the key metrics the industry uses to track activity — “Days on Market” or “DOM.”

Our local MLS service, REIL (Real Estate Infolink) is soon going to ban relisting. (Full article here.) In order to get a new MLS number (and hence appear like a fresh listing and get a fresh DOM count), the property will have to be off the market for 30 days, and the seller will have to sign a new listing contract.

I think this will policy will have several effects:

• For agents and the general public, it will reduce the confusion about whether a property is newly on the market or not.
• For the seller and the listing agent, it’s going to be more important than ever to come on the market at the right price. There’s going to be no hiding the fact that a particular property has been on the market for, say 8 months.

My opinion? I think it’s the right move. Anything that provides more clarity to the market and enforces better pricing discipline on sellers and listing agents is a good thing.

Tags: MLS, Real estate, REIL, Relisting
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• Stale Tuna And Resetting The “Days On Market” — Chicanery And A Public Health Risk, Or Just Plain Old Good Salesmanship?