MLS Misinformation

August 29, 2011 By Leave a Comment

One of the sayings that I retain from my years in the technology is one that is applicable in so many things every day: “garbage in, garbage out.”  In this circumstance, I speaking about some of the data that is input by real estate agents into our local MLS.

It seems almost any time I’m searching for properties for a client, I come across one or more listings that either have inaccurate or incomplete information that affects the marketability of the property.  Oftentimes my clients will read something and assume it is gospel (when I know better) or will note that there is a lot of missing information.  Some of the most common issues I see and why they matter:

Lack of photos

  • If we can’t tell what the house is like on the inside or out, we often put it towards the bottom of the list – there are a lot of homes for sale and we don’t want to waste time on a house we didn’t view first online

Poor photos

  • If all I can see is the flooring or if the room is very dark or the shot is a light bouncing off a mirror, there’s no way to tell what the house is really like.

Missing association info

  • If it is a condo or townhome, it is important we know what the fees are and what it covers.  Also vitally important: pet restrictions.  Some associations ban dogs or put breed and weight limit restrictions in place… this affects many homeowners.

Missing room dimensions

  • I see too many listings that have no room dimensions – this makes it very difficult to gauge room sizes and some buyers have particular needs.

Old tax information

  • While it is easy for me to pull current property tax data for my clients, agents often have the prior year’s tax info online for 6-9 months into the new year and this information is displayed on consumer web sites and used in mortgage calculators.  In a time where property values are fluctuating wildly and property tax rates are climbing, there can be $100′s difference between one year and the next.
No extra details
  • Agents can put in details about the roof, the tree coverage, exterior finishes, hardwood floors, number of bedrooms on one floor, accessibility, basement description, etc.  For clients looking for something particular, unless we go through each listing by hand we will certainly miss many of the homes that would work for them.
While MLS data is by far the most accurate and comprehensive property data we have, it is incumbent on the agents who enter listings to ensure that the data is as correct and complete as possible.
Filed Under: Community Issues, MLS Compliment & Criticism, Opinion, Personal Experiences

1700+ Short Sales Stuck Waiting for Bank Approval

August 15, 2011 By Leave a Comment

Short Sales By The Numbers:

5,000

We have just under 5000 short sales currently for sale in the Minneapolis/St. Paul area.

1,700

In the Twin Cities, we now have more than 1,700 short sales that have received offers and are waiting for the seller’s lender(s) to provide a response, 100′s more than we had a year ago.  By the way, this means that 1700+ buyers are tied up waiting for properties they may or may not ever get to buy.

35%

Percent of short sale properties for sale that are currently stuck in Lender Approval Limbo that can run anywhere from a few weeks (rarely) to many months (typical).

5.4

Number of months of short sale approval backlog when considering that over the last 12 months we’re only averaging 322 closed short sales each month.

Commentary

The number of total homes we have tied up waiting for lender approval is probably very close to 2000 when taking into account other MLS statuses and minutia too complex to discuss here.  We are years into this housing downturn and while banks seem to have figured out foreclosure sales and can process those pretty smoothly, they are nowhere close to having short sales down.  Considering a large percent of the failed short sales end up as foreclosures, quickly and properly addressing short sales could literally cut 12+ months off of our foreclosure activity.

Banks: get your stuff together and help us (agents/buyers/short sellers) help you.

Filed Under: Community Issues, Foreclosures and Short Sales, Info for Buyers, Market Stats, Opinion, Personal Experiences, Short Sales

MN Government Shutdown Means Fewer Real Estate Agents

July 12, 2011 By 3 Comments

Of the many things that are affected by the Minnesota Government Shutdown is a majority of the Department of Commerce.  The Department of Commerce does things like well, regulate commerce.  With it largely shut down, investigations and enforcement are hampered and any businesses that rely on licensing cannot make changes or additions until the doors open back up.

Real Estate Agents in Minnesota are required to be licensed and get re-licensed every 2 years by filing a renewal and completing 30 hours of continuing education.  Licenses expire on June 30th and quite a few agents did not complete their renewals timely.  Usually this just means a small penalty and a couple days of hassle.  This year however, if their license lapsed July 1st they will not be able to be reinstated until the government reopens… whenever that means.

I am quite confident that means 100, 200, or even more agents are currently without a career – if you do not have a current license it is illegal for you to practice real estate sales.  Further, we have somewhere around 100-150 newly educated and tested people each month that will not be able to get licensed until the doors reopen.  At the same time the number of real estate agents is still declining in Minnesota, so this is amplifying the trend… at least in the interim.

Agents that want to switch brokers and agents that are ready to open their own brokerage are also stuck for the same reasons.  Most of this stuff is now computerized and requires little to no human intervention but the servers were taken down at the time the lights went out.  If anyone wants to find out if someone is licensed, they won’t be able to do that till the lights come back on either!

As we now are nearing the end of the 2nd week of government malfeasance, I cannot help but wonder how long this will go on.  For those of us who are still licensed, there will be just a smidge less competition for buyers and sellers – for however long this problem continues.

Filed Under: Community Issues, Ethics, Market Stats, Opinion Tagged With: , ,

Foreclosures and Short Sales Don’t Matter to House Prices

July 5, 2011 By 7 Comments

While foreclosures and short sales continue to be around 40% of our sales, when looking at housing prices I believe they should be completely ignored.

When looking at all Twin Cities housing sales, here is how the Median Sales Price stacks up:

median sales price - all properties - twin cities real estate

 

When we split it out to look at Foreclosures, Short Sales and Traditional Sales, we see that Traditional Seller prices have not fallen nearly as much as the composite number suggests:

median sales prices for foreclosures & short sales - twin cities homes

 

Why we should ignore foreclosure and short sale sales data

If we go back to 2005 and before, the Twin Cities had almost no foreclosures or short sales… something between 1%-2%.  The Traditional Seller market was the market just 6 years ago and once we clear the current housing downturn they will be the market again.

Still, today when Foreclosures and Short Sales account for 2 of every 5 sales, why should we ignore them?  After giving this a lot of thought the answer seems almost obvious now but certainly wasn’t before:  Foreclosures and Short Sales already affect Traditional Sales’ prices.

Today every seller is competing against all other homes on the market, including bank owned and short sale homes.  Each Traditional Seller that successfully sells their home had to go through the pricing and competition gauntlet to secure a buyer at the price and terms of the sale.  While some Traditional Sellers have stronger motivation to sell than others, they don’t have nearly the motivation to sell as a bank.  Whether a foreclosure or a short sale, the bank ultimately determines the sales price and they’re far more motivated to unload properties at whatever price they can get.  This is similar to a wholesale auction versus a retail sale.  One must also take into account that most foreclosures and short sales typically need money for repairs as well, which further decreases their value at time of sale.

So since Traditional Sales already sell at prices that take into account the competition from Foreclosures and Short Sales, by including them in sales price averages we are effectively double-counting the impact from these distressed properties.  Consequently the truest measure of where our housing market was, is and will be is found by looking at the prices that non-distressed sellers are getting in this market.

Filed Under: Crystal Ball Projections, Foreclosures and Short Sales, Info for Buyers, Info for Sellers, Market Stats, Opinion, Short Sales Tagged With: , ,
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This website is a service of Aaron Dickinson of Edina Realty, a broker Participant of the Regional Multiple Listing Service of Minnesota, Inc.