How to report MLS violation

TF

I saw many instances that a MLS listing is pulled out of the market, and back to the market a week later without any change (sometimes the price is even higher). I'm pretty sure the agent just wants a new MLS number and makes the property looks new on the market. Is it a MLS violation? How do I report it?

SandyK

You can call the MLS directly at 425-820-9200. I am not sure who you would talk to but just tell the receptionist and she can probably direct you to the right person.

The_Tim

Actually TF, we've been over this topic a couple of times on Seattle Bubble before. For a detailed history, check out these three posts:

Anecdote: Reloaded
Update: Anecdote: Reloaded
If the MLS is an advertisement...

I'll give you the summary here though. The NWMLS rule is stated as follows:

You may not cancel and relist a property, even with a new listing agreement and new listing input sheets, unless there is a material change to the listing (e.g., a significant change in the price of the property, a remodel, a change in zoning, or a change in ownership).

So right off the bat, any property where there has been a "significant" change in price (I take this to mean at least a few thousand dollars) can be pulled and re-listed with a new number without violating the rules.

However, even if the price does not change, there is a loophole that is exploited (I'm guessing fairly commonly) to re-list a property without breaking NWMLS rules. The key is in the difference between "cancel and relist" (forbidden) and "let expire and relist" (allowed). When an agent writes a listing agreement with a seller, it is given an expiration date. If they want the property to continue looking fresh on the MLS, all they need to do is give the listing agreement a short expiration date, and ta-da: upon expiration, they can re-list it with a new (also short) agreement.

That's my understanding of the process anyway. Any one in the business of real estate that's reading this, please feel free to correct me if I've still got it wrong.

SandyK

The Tim--I am in the business of real estate--you know me from the SREP blog. Remember how I said I'd never come over here? Never say never, I guess.

The situation TJ described sounds like a violation of MLS rules to me. He can call the MLS directly if he wants to let them know about it. They do enforce that rule but I don't think they have the manpower or technology to always be able to find the violators.

The_Tim

How would someone other than the seller or the seller's agent be able to tell the difference between "cancel and relist" and "let expire and relist"? In the links above, I was fairly certain there was a rules violation happening too, but was assured by a variety of agents that it was not in fact.

Also, if as TF says, the price has been changed, doesn't that get around the rules violation?

SandyK

Well, any agent can tell by looking at the property history whether it was canceled or expired. But the general public can't tell this as easily as you don't have access to the history.

Most of the time we don't call in the rules violations on this because it's a tough allegation to prove. The wording of the rule, as you may have noticed, is a bit loose around "significant" changes, so since "significant" is not defined it's hard to prove there is a violation.

What interests me in the example you linked to is the whole letting the listing expire rather than cancelling it. That would in fact not be a violation of the rules. So although I agree it is VERY sneaky, that case was one where the MLS could have done anything about it.

PS--the MLS listing is actually an advertisement so we are in fact held to truth in advertising just as we would be in any other profession. But then the question is whether the method of listing/cancelation/expiration is part of the advertisement or not, since it is not available to the public. Perhaps someday an attorney will sort this all out for us.

Meanwhile, if you see things you think are rules violations, you should feel free to call them in.

TF

It is sneaky. The house I was looking at was listed at 575K. It was pulled out of market. Two week later, it was relisted for 595K. There's no material change (except price). I feel the agent knew what they were doing. They tried to make the property look very different. Here's what they do:

1) Relist with new price, and new set of photo. The new pictures are amazingly UNATTRACTIVE comparing with the previously listing. The only reason why they don't use better pictures that I can think of is that they want the property looks very different. From the pictures, if I hadn't followed the property closely, I couldn't tell they are the same property.

2) A week later, they figured that nobody notices their violation. In order to attract buyers, they updated the pictures, which is definitely more appealing. Ah, this time, it looks similar to previous listing.

Any way, it's my understanding. I could be wrong, but it's more likely they are trying to hide something. I'll call MLS to complain.

Even this not technically a violation, I still think buyers should know the fact. We shoud write a review on redfin or zillow if we find such a case, don't you think?

SandyK

Ah, here's the rub. The MLS would almost certainly consider a $20K price increase to be a significant change. A $1K price change would not be, but $20K probably would be.

This is the problem with using words like "significant" rather than being more specific. If this was a law, it would be considered bad law to write it that sloppily.