The Toronto real estate sold data drama continues, after less than a month of being published. Toronto Real Estate Board (TREB) notified members that there have been reports of false sold data being submitted to the MLS. Agents looking to “protect” consumer privacy have submitted false sold information, to obfuscate how much was really paid for the home.
Toronto Real Estate Agents Input Fake Info
Manipulation of the days on market is nothing new, but faking sold data is new to us. Since TREB was ordered to open up data, a few agents have been accused of inputting false information. At least one incident saw an agent put $1 as the sold price, in an effort to obfuscate the property’s history. The reason is, according to agents, customers are concerned about privacy. Rather than telling clients it’s unethical, apparently some agents just submitted fake information.
Toronto Real Estate Data Is Increasingly Useless
The $1 sold price issue can f**k up statistics, by lowering comps and average sold prices – it’s basic math. For example, if you sold ten $10 widgets, and report one as $1 sold, the average sold price is now $9.10. There was no $1 widget for sale, and most people seeing that would understand it was false data. However, the integrity of the market data is skewed as time goes on.
Next year, if no one else lowers the numbers, the numbers would soar unintentionally. For example, if all widgets sell at $11, prices have increased 20.87%. Few people in the market will wonder how the previous year’s numbers were made. The only thing they know is the news reported a massive increase, and the FOMO hits. There’s a word for this in equity markets, but it slips me right now.
TREB Tells Agents To Stop
Earlier today, TREB sent a note requesting agents not submit false data into the MLS. “We have received reports that some Members have been reporting inaccurate figures in the sold prices of their listings due to privacy concerns raised by their customers,” the email opens… before telling them they “appreciate” the privacy concerns. It later reminds them that failure to comply with TREB MLS rules and policies, can result in disciplinary proceedings and/or suspension or termination of TREB membership.
Ordering TREB to allow members to share data is one step to consumers getting better info. Unfortunately, if the quality of that data isn’t great, it’s of limited use anyway. The false information has serious consequences, and actually would make the information worse than closed data. This of course assumes that agents were submitting the correct information the whole time. If you can easily submit sold information as under the true price, what was stopping agents from submitting over the sold price?
Side note: Congrats to my pal that sold his house, after only being listed for “one day” on the market. 😉
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