Recently, Inman News published an article on the misleading prices that are often attached to Trulia.com and Yahoo! Real Estate preforeclosure listings.
It’s a good read, which features commentary and possible solutions from Foreclosure.com Founder, President and CEO, Brad Geisen, about how to correct the problem.
Unfortunately (and unsurprisingly), RealtyTrac.com Vice President of Marketing, Rick Sharga, took exception to Brad’s input. That’s because the company that he represents supplies Trulia.com and Yahoo! Real Estate with their foreclosure data.
Let’s go through a few of Mr. Sharga’s comments line-by-line to clear the air once and for all.
Here he is talking about their misleading listings:
“Neither Yahoo Real Estate or Trulia or RealtyTrac is setting out to mislead anybody. Anybody looking to purchase a foreclosure property is going to have to educate themselves a little on the process. It’s not as straightforward as just buying a resale property from an agent.”
Whether it is done intentionally or not, RealtyTrac — and by association Trulia.com and Yahoo! Real Estate – doesn’t appear to have either the desire or the ability to make it clear that the prices associated with some distressed listings are often not sale prices.
Therefore, while Mr. Sharga claims, in theory, that he and his partners are not setting out to mislead anybody the reality is that they are.
For example, if a Web site visitor sees a home in his or her neighborhood for less than $100,000 -– even though the average sale prices in the area for similar homes are $250,000 or more -– he or she would likely want to find out more about it, right?
To do that, however, he or she must sign up with a credit card to learn more. And when that potential visitor drills down to the exact property he or she may not realize that it is actually a lien amount (not a list price), duping the visitor and creating utter confusion.
Furthermore, many of these types of listings are NOT EVEN FOR SALE!
Accordingly, is it really the responsibility of potential homebuyers to “educate themselves,” as Mr. Sharga suggests, on the difference between how lien and list prices are featured on a Web site or should the data provider take the responsibility to make it crystal clear?
In short, this is a data “packaging” issue and nothing close to an education issue. Potential buyers shouldn’t have to have legal degrees or sift through fine print just to fully understand correct real estate listing prices.
Let’s move on to the next quote from Mr. Sharga:
“To clamp down on dispensing that information across as wide a range of eyeballs as possible would really be doing the people looking for the properties a disservice,” Sharga said. Alluding to Foreclosure.com, Sharga said, “If I was running a site that had only a third as many listings, I might suggest that was a good alternative, too.”
On numerous occasions RealtyTrac.com has been exposed for reporting over exaggerated foreclosure figures … Congress even got burned! That’s the blatant truth behind RealtyTrac’s “stats.” In fact, the company often triple counts multiple listings and fails to expire old listings in a timely fashion (To check out just some of the evidence click here).
That’s likely the reason Foreclosure.com has “a third as many listings.”
It’s common to see the same property listed numerous times on RealtyTrac because each lien holder is often counted as an additional property. For example, let’s say House X goes into foreclosure and has two mortgages and a lien on the home from a roofer who didn’t get paid his $25,000 in repairs after Hurricane Wilma.
RealtyTrac would likely count that as three properties (the two loan defaults and the roofer lien) when in reality it is really just one. On the other hand, Foreclosure.com has the technology, as we well as direct relationships with several of the top lenders, to scrub the data and ensure that it is counted once.
Put simply, we follow each and every property through the entire process and expire it in a timely fashion.
When a company such as RealtyTrac doesn’t do that it forces people to pay good money to view outdated listings under false assumptions. What’s more, and this is the bigger problem, this lack of attention to detail leads to inflated numbers that are sometimes treated like gospel among media outlets with large reader/viewerships.
It’s a domino effect that in turn affects public perception and causes panic and misinformation, damaging consumer confidence. In short, it’s a major disservice to the entire economy when these inaccurate numbers are reported in major media.
Look no further than the Colorado debacle less than one year ago for proof that RealtyTrac publishes overblown and inaccurate data. Unfortunately, some media outlets and local governments have not learned their lesson from that massive and high-profile blunder.
In short, someone needs to tell Mr. Sharga that bigger is not better and certainly most in this business prefer quality over quantity.
And at the end of the day we can sleep easy at night, knowing that we are doing the best we possibly can to provide future homeowners and investors with the very best and MOST ACCURATE distressed real estate information.
Can you say the same, Mr. Sharga?
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