If deserted cities are called ghost towns, what are fraudulent listings called? That's right - "ghost listings."
According to several news reports, the number of fake listings on real estate websites has gone up, particularly in the Big Apple. Listing agents are reportedly posting fake or already sold homes on websites to lure in potential buyers. When buyers bite the bait, the realtors tell them that the home has already sold and instead show them less appealing properties, reports The Real Deal.
"Of course this happens, the bait-and-switch. Brokers are looking for all ways possible to pull in clients," Nikki Field, an agent with Sotheby's International Realty, told The New York Times.
This trend is on the rise due to low inventory and increased direct communication with customers. Sometimes, brokers even create online advertisements claiming the listing belongs exclusively to them when it doesn't. Experts say that national listing sites (MLS) usually collect listings from smaller websites and in the process don't always offer authenticated data.
In New York City, all the listings are monitored by the Real Estate Board of New York. The rules require every listing to be updated within 24 hours of sale unless the deal happens on a postal holiday or a weekend. If an agent violates the rules, the Board imposes a fine on the broker. While there might be rules that govern fair brokering policies, there is not much policing happening.
"You can call and complain. But there is really no police force, so the consumer is poorly served," Donna Olshan, president of Olshan Realty and a real estate board member, told the Times.
Ghost listings, it turns out, are more popular in the rental segment. While spotting a ghost listing may be difficult, there are ways to avoid them. Experts suggest using reputed online listing sites like StreetEasy to search for homes. They also caution that ghost listings usually come under the $1 million category and on sites that have lower "formal insight" like Craigslist.
Meanwhile, less popular sites are upping their ante now that the issue of ghost listings is out in the open. RentHop.com claims they have a certain set of tools that help them communicate better with their brokers and help consumers make transparent deals.
"At RentHop we've developed an algorithm, the HopScore, that helps renters identify listings that are more likely to be stale. The HopScore analyzes real-time and historical data regarding the accuracy and completeness of each listing, the listing's 'freshness' and the responsiveness of the broker or property manager who posted the listing on RentHop. Each listing's HopScore diminishes in proportion to the length of time the listing has been up on the site and the number of times that listing has been viewed," the website writes.
Of course, scams are nothing new for the rental industry. Scamwatch.com has a list of signs to watch out for when considering a rental listing:
- Avoid anything that sounds too good to be true.
- Be wary of an agent always making excuses about why the property cannot be viewed.
- If a landlord lives overseas and an agent approaches you for a lease, do your digging and make sure to authenticate any data about the agent and the landlord as well.
