There’s a lively discussion going on in our office regarding foreclosures and short sales and their impact in this market.  I was going to call it a debate but typically a debate has two opposing viewpoints whereas of the people I’ve spoken to, we all seem to be in agreement: the MLS should add a flag for foreclosures and short sales.

Right now most agents do disclose if their listing is a foreclosure or short sale by saying something in either the Agent Remarks, Public Remarks, or Financial Remarks.  The problem with this method is that agents use 10+ different ways to describe it and can put the data in any of the three fields, making it rather difficult for an agent to either query only for those properties or exclude those properties.

If the RMLS would include flags such as “IS a short sale” and “IS a foreclosure” then agents working with clients that are specifically looking for those properties could easily find those properties for clients looking for them (thereby increasing exposure to those that want those properties) and could filter out those properties for buyers that for one reason or another they have expressed an interest in not considering.

Further, when doing a CMA or other market research, it would make it much easier to determine if one of the biggest factors affecting sales price today was associated with a particular property.

Part of the argument I’ve heard in the past on why we should not add flags to the MLS is that this is a short-term issue and we shouldn’t be so quick to rush in and change things for a short-term solution.  I’d have to disagree for the following reasons:

• Foreclosures & short sales are certainly a much larger issue right now, but they have always existed and always will exist at some level
• REALTORS are notoriously slow to adopt new technology/practices, but there’s no reason we have to be, this is an easy thing to program into our system and wouldn’t take more than a few hours to implement if it was given the go-ahead.
• This is a material characteristic/fact of the property- as much of a characteristic as style, location, and price.
• As even an entry-level DBA (database administrator) would tell you, your data is only as good as the person entering it, the consistency of the procedure used to enter it, and the way the data is stored.  By making it a simple “check box” we will guarantee that a search for this characteristic will include all properties, assuming the agent clicked the check box of course.
• If we have this data stored consistently, it makes it much easier for the REALTOR community to parse the data for research purposes, which could allow us to provide the public and private sector with better market intelligence.
• I’m a big believer in things being taken to their highest and best use.  The MLS is the best source of real estate information known to man but can be taken even further if we implemented even 1/2 the foresight that most startup companies employ.

A few hours now could save hundreds or thousands of hours over the next few years in painful manual processing and help keep our MLS relevant in changing market.