Old properties may look new

Practice of relisting can put buyers at a disadvantage in negotiations

By ZACH FOX - Staff Writer | Saturday, March 22, 2008 10:04 PM PDT ∞

When real estate agents post a house for sale after its original sale listing, a property that has languished on the market for months ---- or even years ---- can look like a brand-new listing.

The practice of reposting a house after the first attempt to sell expires appears to be growing as the local housing market slogs through a severe recession that has entered its second year, based on local and national housing reports.

For example, in Encinitas, one out of every three active listings for homes has been posted previously, according to data from Sandicor, the company that handles listings for San Diego County.

Several have been reposted several times, including one property that is on its seventh listing over the span of 20 months. Some real estate agents have listed homes with higher asking prices than previous listings.

Real estate agents representing sellers post, or list, the properties on what is known as the "multiple listing service," a database open exclusively to agents so they can search homes that are available for sale.

Some buyers said they thought the process was deceptive, while real estate agents and analysts said it is the seller's right to remove a property from the market and repost it later.

By reposting a listing, the seller is able to reduce the reported number of days the property has been on the market, a piece of information real estate agents said buyers often use to gauge their negotiating position.

"I understand why they do it. It's not fair that sellers face a stigma just because they've been unlucky in finding a buyer," said Norm Miller, a real estate professor with University of San Diego's Burnham-Moores Center for Real Estate. "At the same time, as a buyer, I'm not going to rely on that days-on-market number."

Real estate agents and professors said the practice is common and illustrates the need for buyers to secure an experienced, trustworthy buyer's agent.

Generally, real estate agents repost a house only because they have to. Each property listing is set for a certain amount of time, such as three or six months. If the house does not sell within that time, the listing expires and the real estate agent has to repost the property.

"A seller has the right to list their home, take it off and put it back on a year later. There's no foul play, there's no game play," said Sue De Legge, a real estate agent in Encinitas who represents a reposted property that was originally listed almost a year ago with another agent.

"That's why having a knowledgeable agent with strong negotiating skills and research skills is important," she said. "That agent will tell the buyer, 'It's been on the market before.'"

Real estate agents said checking for property history, including previous listings, is what makes buyer's agents valuable and distinguishes agents from "limited-service" operations, such as online companies that process real estate sales for a reduced commission.

Some buyers said they were disturbed by the practice and thought it could be misleading.

"It's definitely dishonest because they're not giving you the full scoop of what's going on," said Robert Hogge, a Vista resident looking to buy his first home. "If it's been listed several times, taken off the market and put back on, I would want to know that. And obviously, I would want to know why it was taken down."

Louis Galuppo, a real estate lawyer and director of the Burnham-Moores residential real estate program, said there were neither legal nor ethical implications in relisting the same property multiple times.

Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Comment at nctimes.com.

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