7 problems with online listings
From the glowing write-up and bright pictures on a major real estate website, the powder blue house in a relatively pricey Boston suburb would appear to be just the place for a first-time homebuyer.
While the median sale price in Natick, Mass., is $374,000, the asking price for this house, according to the online listing, was $269,000 and was last sold in 2004.
"STARTER HOME IN NATICK WITH AFFORDABLE PRICING. ALL HARDWOOD FLOORS IN GOOD CONDITION. HOUSE FEELS BIGGER THAN IT LOOKS. FENCED BACK YARD WITH DECK," read the description of the property.
But a closer inspection of the property and other real estate records provides a starkly different picture.
The two-bedroom, one-bath home was sold at a foreclosure auction for $175,000 in late 2009, and is now empty, with a boarded-up front window. A major freight and commuter rail line runs less than 100 feet away. And there's not even a front yard, just a parking-space-sized driveway between the house and a busy cut-through road.
According to the National Association of Realtors, "Eighty-nine percent of home buyers used the Internet as one of the information sources in their home search process." With that number expected to grow, inaccurate or outright misleading and deceptive information and pictures are a growing national problem.
Before you start your online search, here are seven pitfalls to avoid with online real estate listings:
1. The house has already been sold. Clients excited over a great home they saw online are the bane of Troy Deierling's existence. If they have seen the listing on one of the popular real estate websites, as opposed to his site or that of another agent, the homes have often been sold weeks before.
"What we run into are the clients getting disappointed or upset. They find these other homes online that are not available anymore," says Deierling, a Realtor with Sotheby's International Realty in Sedona, Ariz. "It's like you go fishing and someone tells you should have been there last Saturday."
The explanation is simple: Real estate agents get their information directly from the Realtor-run multiple listing services, so it is updated continually, says Deierling. But once it hits one of the big consumer real estate sites, a listing can sit there for months, growing more outdated by the day, he notes.
2. The price is wrong. Even if the house is still on the market, lots of other things may be wrong with the description. For example, the price may have changed, and maybe more than once, since it was posted. But if no one has bothered to update the listing--and that's not unusual with a big real estate site that aggregates listings--you'd never know.
"Day one, when (the listings) go out, the problem happens," says Deierling. "If they have a price change, if it's sold, it's not reflected." Not exactly a promising start for a prospective homebuyer who is likely wondering "how much house can I afford?"
3. Square footage, other basic facts are deceptive. Ever walk through a condo or a house and wonder how the listing could have claimed it was 2,000 square feet? Sellers can easily distort square footage--after all, who's counting--to make a home that is cramped seem larger, says Bill Wendel of Cambridge, Mass., owner of the Real Estate Café website and a buyer's broker.
Some sites let sellers alter the details--someone could always be tempted to add on a few hundred square feet. And it's not just square footage--the mortgage rates quoted may not be available or conditional as well.
4. Listing history doesn't tell full story. There can be a big difference between a house that just hit the market and one that has languished for years. But that's not always clear from online listings. Brokers have long played the game of pulling off and relisting a property to disguise the fact it has gone unsold for quite a while. According to Wendel, potential buyers looking online need to ask, "Is this a recycled property or is it truly a new listing?"
5. No mention that it's a foreclosure. Just take that Massachusetts home at the start of this article. The home you are looking at may very well be a foreclosure, but for whatever reason, that info never makes it onto the online listing. That detail can make a huge difference. If the house has been sitting empty for a couple years, it's likely to be in poor shape, and the price listed online may not accurately reflect the home's true condition.
6. Misleading or outright deceptive photos. Seeing is definitely not believing when it comes to online home listings. First, there is the outright cheating--photo editing in features that don't exist, such as a garden or a brand new kitchen.
Then there is the more garden-variety bending of reality that may be even harder to spot. A wide-angle lens could make a tiny family room look positively spacious, while new software programs enable you to change the colors on the walls and make other upgrades.
"Don't be surprised if you get there and it doesn't meet the fantasy you had," says Wendel.
7. Silly real estate stats. Online listings often come with nifty charts showing week-by-week price fluctuations of the neighborhood or town. Don't be fooled; such stats are as meaningful as the Cubs record come September.
Homes can take months to sell and, as a result, market trends play out over months and years, not days and weeks. The sale of a million-dollar home on the fringe of a blue-collar area could send prices soaring for that week, but it really says nothing about the rest of the homes in that neighborhood.
"Many of these sites will have very short-term snapshots of the market," warns Rona Fischman, principal broker of 4 Buyers Real Estate in Cambridge, Mass. "They (buyers) will draw conclusions. Drawing conclusions in a market that is this slow moving is economic nonsense."
Related articles :
More help from HSH.com
10 metros where a home costs about $1,000/monthHSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
Home price recovery index: Which metros have improved the most, least?Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peaks they reached before the crisis?
How do I know refinancing will be affordable?After to determine the goal of your refinance, deciding whether that goal makes sense (or not), given your personal situation, depends on a combination of factors.
The salary you must earn to buy a home in 27 metrosHere’s how much salary you would need to earn in order to afford the median-priced home in your city.
VA Funding Fee: 5 facts you need to knowOne slight drawback of securing a VA loan is that borrowers often have to pay a fee, known as the “VA Funding Fee.” Here are five facts you need to know about the VA Funding Fee and how it works.