How overuse of exclusive listings undermines MLS®

 

Given our existing low listing inventory situation, many Realtors are convincing their buyers to “try” an exclusive listing to sell their property. While anything a seller and listing agent choose to do is up to them, it does have some consequences for the overall market, including that particular seller.

These exclusive listings are often flagged with sign toppers that say “exclusive listing” or “Coming Soon…” and we believe many listing agents wish to cash in on the listing scarcity for their own marketing and prospect generation purposes. What better way to entice a buyer to contact them than to offer something they may not be able to access otherwise?

Seller cannot be sure they actually get full market value for their home/property:
Selling to a small subset or “VIP” audience of buyers does not necessarily generate a full market value offer. Full market value can only be obtained by the widest possible exposure of a listing to the full MLS® market over time and this does not happen with these grey market listings.
The bottom line is that if the seller is happy with the price they get…then so what? …but just like the seller who sells quickly and then wonders “ should I have listed higher?” the exclusive listing seller may wonder the same thing.

No oversight on “exclusive” listings:
These listings are not on MLS® and therefore not subject to the extensive policies and processes administered by our Ottawa Real Estate Board to ensure fairness and equal access. The Board has no authority to investigate such listings and the 63 pages of OREB MLS® rules do not apply, so though not probable-abuses are possible.  Ie. Might a listing agent choose to give preferential access to their exclusive listing to their own buyers?  Or to their own small circle of Realtor friends or preferred Realtors?  One of the reasons MLS® works so well is that it is available to all 3,000 plus Ottawa Realtors and their buyers with equal access.

Loss of listing inventory may artificially inflate demand in the MLS® marketplace:
Further limiting supply in the listing starved MLS® market, will only enhance demand and potentially push prices higher. Our Ottawa market has been successful over the years by being steady and not as subject to the peaks and valleys of some of our Canadian neighbours.  Spiking demand and driving prices up to double digit increases, risks a longer and flatter market when demand eventually does level off.

Loss of listing data hurts buyers, sellers and Realtors:
By selling a property on the open non MLS® market, the MLS® system gets no data capture from that transaction and that information cannot be used by future buyers and sellers (and their agents) to assess their own buying and selling plans. MLS® data (and photos!)  is critical to helping the marketplace judge what market value should be and losing out data makes that process more difficult.

Searching listings for buyers is a real challenge in this marketplace and the more places a buyer or buyer agent has to sift through to find new listings, makes the search process that much more difficult and frustrating.

MLS® listings should not be “old news”
If a large % of listings get advance marketed as “exclusive” listings for 2-4 weeks and then ultimately get listed on MLS® for full exposure then MLS® listings run the risk of being deemed “old news” which is not good for the credibility and integrity of MLS® as “the” place to go for new listings.

Just because you can, doesn’t mean you should:
Just because online marketing and social media presence make it easier and more immediate to market properties today than in the dark printed past, doesn’t mean one should short circuit the central MLS® system.

While many coin operated Realtors may choose to find the shortest, quickest way to a closing and a commission cheque, most will realize that continuing to utilize the MLS® system and protecting its integrity, is still the best way to market listings. Trying to short circuit the system for marketing advantage ultimately weakens our MLS® system and makes losers of us all.

Why is the listing agent proposing an exclusive listing?
We are clearly not in favour of the widespread use of exclusive listings and we certainly didn’t see too many of them when we had a buyers’ market back in 2015 or 2015. So most sellers should have the discussion with their listing agent and try to really understand what it is they are selling and why.  Ultimately, whatever seller and listing agent agree is fine but both parties should be aware that they could be missing out on “top dollar” by not marketing the property first on the full-fledged MLS® system where all buyers and their agents can easily find and consider the property on an equal access basis with well-defined policies and procedures in place.

If you wish to discuss this or any other residential real estate matter with us, we are happy to do so! Feel free to give us a call at 613-435-4692.  You can also follow other items of real estate interest on our website, blog and social media below.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
www.oasisrealtyottawa.com   http://blog.oasisrealtyottawa.com/

https://twitter.com/OasisrealtyOTT   https://www.facebook.com/oasisrealtyottawa/

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Are Realtors sabotaging MLS® with “grey market” listings?

We have experienced a relatively strong market over the last 18 months and listing scarcity has become an issue, as many areas have only a month or two of listing inventory. Listings in 2017 were down approximately 25% from the previous year (35% over 2 years) and with healthy sales, this made things difficult for buyers and their agents, especially those with an existing property to sell.

“Grey” market listings abound: (non MLS®)
In the face of dwindling listings, many Realtors (and their sellers) are getting creative about how they plan to market the listing to the best advantage of seller and Realtor. This includes the use of “exclusive” listings, “pocket” listings and future sale listings.  In most of these types of listings the listing agent does not publicize the listing widely/openly on the MLS® system.  (or at least initially) Instead these Realtors market via social media and a variety of 3rd party online sites.   Have you seen those “Coming Soon” or “Exclusive Listing”signs on front yards in your neighbourhood?  This is most likely an indication of a grey market listing.

How is this advantageous? (and to whom?)
Realtors do this for a number of reasons in our opinion:
-Realtors leverage the listing to potentially generate other buyer or seller prospects
-Realtors have a chance of “double ending” the listing, if they are able to find a buyer without having to pay another Realtor.
-The listing agent in many cases will have used these marketing concepts, combined with a lower listing commission to help close the listing in the first place.
-Realtors may be able to avoid the cost and time involved in some steps of the listing process ie professional photography, staging and also get to a sale sooner.
-are all the above consistent with the Realtor pledge of “first duty to client” or is the Realtor’s own marketing and prospecting activity subverting their principal duty to their seller client?
-some sellers may prefer not having a “wide open” MLS® listing where everybody and their brother are free to book random appointments to see their home.

So what’s the down side?
-these “ secret” listings become a bit of a holy grail and many Realtors really play this up:  Ie “ deal with me and I will get you the inside scoop on all the new listings, so you get to consider them BEFORE they hit MLS®.  Nobody, has access to all the “secret” listings, no matter how strong they may be in the neighbourhood.  The fairest and most democratic way is for all listings to make their way to MLS® where they can be considered by all buyers and their agents.
-all buyers do not get to consider the property and therefore demand is generated by only a small portion of the overall market.
-Buyers may be encouraged in to making a more impulsive offer, given the relative scarcity. This can result in buyer’s remorse and more conditional sales falling through which has been a factor in our market.
-these grey market listings that do not get to MLS®, also then further diminish the level of listing inventory available to MLS® buyers and therefore enhance the supply shortfall and help cause prices to rise.
-MLS® in recent years even includes most of the FSBO listings, so it is a fantastic central repository and marketplace. By withholding listings from MLS®, Realtors are not doing their seller, buyers or Realtor colleagues any favours.  Think for a moment if there was no MLS®?  Would you want Google or facebook to decide what listings you got to see?  MLS® is still ad free, too!
Do you want to have to scour hundreds of websites daily to find and stay on top of new listings in the marketplace?

Selling scarcity is nothing new:
Realtors, buyers and sellers will always adapt to scarcity and attempt to find ways to take advantage and this is no different, unfortunately, it can also lead to further scarcity in MLS® listings and possibly further demand spikes and price increases which is not good for buyers. It also removes some credibility from the MLS® system, if “ new”  listings are deemed to be old news by the time they are published on MLS®.

Seller choice:
A seller may find a deal without having to go through the full-fledged MLS® prep and marketing process and if they are happy with what they get, then so be it. Clearly, however, the best market value is to be obtained with the widest possible exposure to all buyers and their agents and that only happens with a listing on MLS®

Proponents will argue that they are only “getting the best deal” for their seller client but in many cases, we believe Realtor marketing and differentiation are the principal reason for use of these “grey marketing/non-MLS®” listings and that on balance this is not good for the overall market as it fractures and weakens the  central source of MLS® supply and exacerbates already existing supply problems.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage 613-435-4692  oasisrealty@rogers.com www.oasisrealtyottawa.com

12th year in business as a lower cost brokerage

 

Ottawa broker rant: real estate listing photos

is this really a key feature of this home?

 

 

 

 

 

 

We really do have a lot of excellent people in our profession and it is on behalf of all these quality sales people and brokers that we offer the following rant on what we feel are really poor real estate practices by some that should not reflect poorly upon us all!

The “snow in June” listing photos:
C’mon guys!…how tough is it to pop by your listing and get a photo update? How is one serving the seller by telegraphing that the listing has been on the market for quite a while…sheesh!

The 1 photo or no photo listing:
Do you think that this is going get people’s attention or that they will come back to check out the listing later?….keep dreamin’!

Too many listing photos:
6 photos of the front door or the bowl on the dining room table….who needs this? There are very few properties that cannot be effectively shown with 25-35 quality photos that show the layout with some perspective.  Some artsy photographers get carried away but few consumers (and trust me, way fewer buyer agents) want to click through 100+ photos!)

The focus on something you’re not buying photos:
How many listings do you see where the focus is the flower arrangement, the staging, the accent wall, the furniture, the artwork, the dining room table, the knick knacks, etc. Do I really need to see a close up of a vase in the middle of a table when I can’t see the room it’s in?

The (old) cellphone photo:
Some of the listing photos we see look like they were taken with an old flip phone. I guess it works for those going for the dark and fuzzy look…but it does nothing for the online viewer and even less for the seller.  This works especially well (not!) with text that brags about the “bright, airy space with lots of natural light”.

The companion photo set is the one from the agent with the latest and most expensive phone but you can tell they took all the listing photos in about 2 minutes (while walking through the property-hence the blur), since they had to rush off and get the Beamer detailed, pick up their commission cheque or get to their mani-pedi, workout or yoga.

The missing photo scam:
Do you really think that smart consumers won’t figure out the yard is ugly, there are hydro towers or an expressway in the backyard, the garage is falling down, the roof is doomed or that the Army Corps of Engineers are needed for kitchen and bathroom renos?

The super wide angle photo:
…don’t you just love the ones where the fridge or stove looks 6-8 feet wide?

The “why-is-this-in-the-photo?” photos:
Sometimes you just have to shake your head at the unusual things that catch your eye in listing photos. The pet, the diaper pail, the garbage can, the Realtor reflection in the shower door or mirror, the car in the driveway, dishes in the sink….anything that distracts the buyer from assessing the house for their needs is bad news.

The-too-many-too-few conundrum:
Condo listings specialize in this awful practice: you get 3 photos of the unit and 12 of the view, the building complex, lobby, gym, pool, or neighbourhood/surrounding area.  Sure you have a great park or bike path down the street but I want to see the darn place I may be buying!

The “why bother” photo set:
Tenant occupied properties lead the way but are not the only source of incredibly messy, disorganized properties that are clearly not ready for prime time. To be honest, some are so scary; you hope you never have a customer call who might want to see one of these suckers!  You are not doing yourself or the seller any favours by listing those in this condition…so why bother?

Shame on you for not investing in professional photos!
Our industry in Ottawa is serviced by many excellent and reasonably priced photographers who do fantastic photography and hosting services at very reasonable rates. If you are listing someone’s property and asking them to pay $15,000-$20,000 (or more) in commissions and won’t shell out $150 to get some decent photos done? …sorry, you shouldn’t be in the business! Oh, and by the way…shame on your brokerage and manager, too!

The “I-forgot-what-the-point-was” photo spread:
The objective of the exercise is to have the prospective buyer see enough of the key features of the property that they will want to come and see it in person and soon! The photos should highlight the critical features, be consistent with the text and be just enough to keep them wanting more.  Too often, these simple objectives seem to be forgotten.

More of the same (and worse!) in the video world:
All of the above issues and more are present in the now ever present video/Utube/social media marketing which is far from an exact science for the amateur productions too many turn out to be.

If we have forgotten any mind boggling real estate photo practices that you see regularly, please let us know!

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or 613-371-9691
www.oasisrealtyottawa.com    oasisrealty@rogers.com

A full service, lower commission brokerage