When browsing online rental or home sale listings, it’s common to find a property that seems ideal: the price is right, the location is perfect, and the photos are appealing. Yet, there’s often a lingering doubt—is this listing genuine?
Online housing scams are alarmingly prevalent. The FBI reported that over 12,000 people each year fall victim to real estate and rental fraud, resulting in losses exceeding $350 million. A survey by Rently found that 93% of U.S. renters believe rental scams are common, with 90% expressing concern about becoming victims themselves. Notably, 88% of these scams were linked to listings on Facebook, making it a hotspot for fraudulent activity. Craigslist, Zillow, and other online portals have also succumbed to fraudulent listings. Today, Multiple Listing Services (MLS) can deliver a solution.
These scams erode trust between consumers and real estate professionals, complicating an already challenging process. Scammers often duplicate legitimate listings or create fake ones, enticing potential renters or buyers with attractive prices and amenities. Once contact is made, they may request personal information or upfront payments, only to disappear, leaving the victim without a home, and out-of-pocket. MLSs can combat these scams using the same anti-fraud techniques that MLSs deploy to combat the theft of IDX listings.
In light of the recent removal of the offer of compensation from MLSs, there’s an opportunity for MLSs to expand their scope by including rental listings. The offer of compensation is not common on rental listings, so MLSs stayed away from them; the same holds true for commercial listings and new home listings, but those are articles for another day.
By opening the MLS to rental listings, the MLSs can provide a centralized platform of verified listings, enhancing transparency and security for both consumers and real estate professionals. This expansion could help mitigate the risk of encountering fraudulent listings, restoring confidence in the housing search process.
By and large, MLS systems are already configured to support rental listings by real estate brokers and agents. It’s time to use and promote them. Sure, some may need to update their MLS participant agreements, but that is light work. Many MLSs around the nation have policy examples to guide MLSs who need to research the structure. This would be a great workshop to be offered at the Council of MLS Conference, Clareity Conference, MLS Reset, and/or MLS client summits. Get in a room and allow MLSs who have rental programs to share their insights and best practices with peers who have not launched rentals.
Alternatively, products like Rental Beast have proven to offer alternative methods and solutions. Most of all, the MLSs who have launched rental application programs have seen a windfall from profit sharing through rental application fees. Best of all, the MLS can support current brokerages who offer property management solutions and invite new MLS subscribers who provide property management services. There is strong potential for MLSs to expand their subscriber base, drive new revenue, and better serve the professional and the consumer at the same time.
To protect consumers from potential scams, agents can verify the legitimacy of a listing by checking property records, visiting the property in person, and avoiding any transactions that require upfront payments without proper verification. Utilizing a trusted platform from the MLS, and consulting with licensed real estate professionals can also provide an added layer of security.
WAV Group supports MLSs through the process of launching rental market places and would be happy to work with your organization to develop a playbook for success.