I've always wondered why some of our buyers keep asking us about properties that aren't really for sale that they found on some consumer real estate Web site. I could understand it happening once in a while but in reality it happens a lot more than I would expect.
So when I was taking inquiries from Realtor.com the other day and EVERY inquiry was about a property under contract I got really suspicious. I started to research the problem and found that many sites show Chicago homes that are already under contract without making it clear that these homes are under contract. And here's the kicker: as of right now, Saturday evening (I have no life), 29% of the Chicago properties that are "active" on the MLS are already under contract. And since these homes are under contract we can assume that they are on average more desirable than the homes that are not under contract yet and therefore you are more likely to find them interesting. In other words, more than 29% of the homes you find interesting in the city of Chicago on these Web sites are going to already be sold.
So let's take a closer look at which real estate Web sites have this problem - at least in Chicago.
I think it's really embarrassing that the official Web site of the National Association of Realtors and one of the most popular real estate search sites has this problem - at least for Chicago. And for these listings there is no indication that the properties are already under contract. Now I don't know the reason for this situation but it is worth noting that Realtor.com sells advertising to real estate agents on every listing page so the more listings they show the more advertising they can sell. These listings are essentially buyer bait - a way to capture lead information on valuable active buyers.
Zillow.com, also a top real estate search site, has the same problem and perhaps for the same reason. Zillow also sells advertising to realtors for each listing.
I decided to check the real estate Web site of a few brokerages - nothing exhaustive. In the process I did discover that Rubloff is returning listings that are already under contract in their search results. At the top of the page you can request to schedule a showing for these but further down the page it does indicate that these listings are "pending". But this status is almost certain to go unnoticed in the laundry list of other facts about the properties. Rubloff then has a chance to pick up buyers who inquire about these sold listings. Again, I'm not saying that Rubloff is intentionally showing these listings to pick up buyers but that is a beneficial result of this problem.
People Who Live In Glass Houses....
So I figured that before I wrote this blog post I should probably check out my own real estate Web site. Whoa was I surprised! It turns out that our 3rd party search software has the same problem. In fact, the listing detail page doesn't even indicate anywhere that the home is under contract. And our 3rd party provider also powers property search for thousands of other real estate brokerage Web sites across the nation.
So we need to investigate this to find out if there is a way to fix it. Just rest assured that I do not endorse the practice of showing homes under contract as if they are still available for sale. However, I will point out that we did develop some custom property browse functionality on our site - browse Chicago homes by neighborhood and browse Chicago homes by zip code - where we took great pains to only display homes that are still listed for sale. It's not that hard to do this right.
The MLS Is The Only Accurate Source Of Homes For Sale
If you really want to be tapped directly into the source of the data and be certain that you are going to see up to the minute information you really need to have a real estate agent set you up with a property search directly within the MLS. Besides getting you more accurate data a good agent can also set up much more precise searches involving a number of different criteria not available on most consumer real estate Web sites.
The odd thing is that most buyers continue to search for homes on the consumer Web sites even after having an MLS search set up for them by their real estate agent. I'm not exactly sure why but I suspect they just don't trust the MLS to show them everything or they want more control over what they see. But invariably every "missing" property that they find is either already under contract or doesn't meet some criteria that they communicated to their realtor. The latter scenario can actually prove helpful because sometimes the initial criteria needs to be challenged. In fact, I recently closed a deal where the home did not meet the initially agreed upon criteria. So these consumer real estate Web sites can prove useful and who can argue with leveling the playing field?