Moneywise journalist Serah Louis, picked up a story of homeowners who found their home at the center of an online scam. A woman named Mandi, calling with a Las Vegas telephone number, fraudulently listed a property in Missouri on a national brokerage website and claimed in the property description that they own many homes and sell a few each year for well-below market value to benefit a family in need and to get a big tax break. The full article is available here on Moneywise. At a time when the real estate industry is taking criticism from all sides, how can this avoidable practice be allowed to continue?
This is not an isolated incident. It seems to plague the rental industry more than single family home listings, but the problem is horrific. I expect that the real estate industry can police itself on this matter. MLSs across the nation have policies about broker participation, and REALTOR Associations have the Code of Ethics. The website of the national broker appears to be in breach of these policies. Clearly this broker took a listing and marketed a listing without a contract, by allowing an unverified consumer to list a home for sale on their website as a ‘FSBO’. The broker took down the listing when notified, but on what grounds should they be taking listings like this at all? Where is the Code of Ethics? Where is the moral conduct? Where is the MLS rules violation? Where is the oversight and consumer/homeowner protection?
I do not know why Associations and MLSs do not impune this broker’s conduct with sanctions that are in place for this egregious behavior. Why is this brokerage and national brokerage website treated differently from other NAR members or MLS participants? I am sure that the broker has a well-wordsmithed and well-lawyered answer that defends them against a clearly abhorrent practice that defrauds consumers, but it is not in fact protecting consumers. Is our industry too weary to fight for what’s right? The homeowner reached out to the national brokerage and the firm did not even respond to them. They just removed the listing and moved on.
Beyond the National Association of REALTORS® and their MLSs.
Surely this behavior is well-known to federal and local law enforcement and consumer protection agencies. The fraud here is interstate – Missouri and Nevada; seems like a case for the FBI. Where is the action by the Department of Justice, Federal Trade Commission, or Consumer Financial Protection Bureau? At least the Michigan Attorney General deserves a shout out for posting a fraud alert about real estate advertising scams. The Michigan Attorney general cited a Florida listing at a fraction of the actual worth with the listing “agent” indicating it would only deal with first-time homebuyers without representation and the “agent” also required a $4,500 deposit before the home could be viewed. This is a phishing scam being enabled by a national real estate brokerage and a member of the National Association of REALTORS and most MLSs.
Consider this. In August, homebuyers who request to view a property will be connected to a Realtor who starts the conversation by informing them that they need to enter into a contract that requires them to pay for buyer’s agent services in order to view the property. Sounds a lot like the fraud alert scam issued by the Michigan Attorney General.
These State and Federal agencies are too focused on tearing down the safety net of organized real estate that stands on the wall that protects consumers from fraud. Clearly a fraud alert is not enough to encourage this national broker to shut down or modify the service. It’s been happening for more than a decade.
Evermore, there is great purpose behind supporting consumers with a fraud-free-opportunity to search for homes. Why not replace IDX with MLS consumer facing websites that follow the Clear Display Guidelines, that are open to all consumers without registration? MLS consumer websites are a safe and open place to search for property information that is immune from scams and fraud. MLSs also need to clearly communicate the safety of the gated MLS search experience. With the removal of the offer of compensation from the MLS, perhaps the IDX system has outlived its purpose and usefulness. Why not retard listing syndication?
One way or another, it’s incumbent on organized real estate to protect consumers against frauds and scams. To survive, we must get better.
Love this article and what it promotes. Let’s be better and have ethics and integrity about our work. Only focusing on money and greed brings bad results and puts a cloud over everyone in the real estate industry.