It's been almost 2 years since I wrote about how Realtors lie to get your business - in particular when they are trying to get you to sell your home through them. Back then I really didn't share specific examples of the deceptive practices but recently I came across a couple of great case studies of real estate agent false advertising that I thought I would share with you. This type of advertising is fairly commonplace and I suspect it works on the uninformed consumer - otherwise real estate agents wouldn't do it, right?
First, I recently came across this bus bench ad in Bucktown. After much thought I decided to block out all the identifying information of the real estate agent and their brokerage.
As my wife pointed out it's possible that this realtor is advertising that their commission is 10% higher than everyone else's but I suspect that's not the point they are trying to make. More likely, the claim here is that the realtor sells homes at a 10% higher sales price - presumably 10% more than what the seller would get if they were using another agent. Here is how we know this is a totally bogus claim:
- The fact claimed here is totally indeterminable. In order to make this claim you would have to have two agents sell the same group of homes at the same time to see if they got different prices, which of course is impossible. Alternatively, you could do a complex statistical analysis that attempts to separate the impact of agent capability from about 20 other variables that determine home values. When you are done you would end up with a huge degree of uncertainty around the result.
- So we are supposed to believe that buyers will pay 10% more for homes sold by this agent? That's quite a stretch. If true, buyers should stay away from homes listed by this agent.
- Can this agent articulate what they do differently from other agents in order to get this 10% premium? I seriously doubt they could - beyond some vague reference to "marketing". I've seen homes listed by all kinds of agents and once you get past the basics (which many, many agents fail at) there isn't much difference between agents.
Potential home sellers are particularly susceptible to this kind of marketing ploy because they desperately want to believe that there is a way for them to get more for their house - all they have to do is hire the right realtor. However, if a potential home seller encounters a realtor making a claim like this the best way to smoke out the truth is to really try to nail them down on this last point - specifically, what do they do differently to get this 10% premium? There are only so many buttons to push and the top 10 - 20% agents push them all with the same results.
Next, I just got this postcard in the mail, which pushed me over the edge and motivated me to write this blog post. Again, I have blocked out all the identifying information. One side of the card is directly below and then the left half of the reverse side appears below that.
Again we have the claim that this agent can sell a home for more money, which I addressed above. However, what makes this direct mail piece even more insidious is the claim that "These homes were on the market with another agent for 6 months before they hired _____" Uhhhhh. Excuse me. I checked the listing history on the two homes referenced here and guess what? They were NOT listed with another agent EVER!
Some day, when I have more time, I'm going to start filing FTC complaints on this false advertising. In the meantime, if a claim seems too good to be true......
#realestate #chicagorealestate #falseadvertising
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