I've actually written several blog posts in the past about how real estate agents use meaningless statistics and even false advertising to get your business. They do it because apparently people fall for it. It would appear that if you tell enough lies people will believe at least some of them and
elect select you.
I decided another blog post on this topic was in order because I recently caught another top producing agent in Chicago using false advertising to get business. Keep in mind that this is prohibited by the Realtors' Code Of Ethics, the Illinois Real Estate License Act, and truth in advertising laws. How this is permitted to continue is a much longer story that I really don't understand but suffice it to say that I am attempting to do my part to clean up the industry.
I'm really fighting the temptation this time to name names but on balance I think that could have all sorts of unintended consequences. And what we really need to focus on here is what you should watch out for.
This particular realtor (and that term implies adherence to the realtor code of ethics) makes two claims on his team's Web site, on Zillow, and on his team's Facebook page, both of which can easily be shown to be false. The first claim is that he sells homes in only 32 days vs. 76 days for the average agent.
Of course, as I explained in the first post I linked to above, you shouldn't even be paying attention to market times in the first place. But suppose you want to anyway? Well, I looked at this guys market times and I came up with 81.2 days in 2015 and 88.7 days for deals that closed in 2016 through August 24 - a far cry from his 32 day claim. For the average Chicago agent it has been around 80 - 84 days. So I have no idea how he is coming up with 32 days unless he resets the market time clock when he cancels a listing and starts a new one for the same property. But that wouldn't be right.
Then his second claim is that he sells homes at 99% of list price vs. 96% for the average agent. Again, you shouldn't even be looking at a metric like that but if you insist I'll tell you that his actual number was 96.0% in 2015 and 96.5% in 2016 through August 24 while the average Chicago agent is running around 95 - 96%. The only way he could be getting his sell to list ratio up higher than that is if he's doing his comparison to the last list price instead of the original list price, which again wouldn't be right.
What Can You Do To Avoid Being Scammed By A Real Estate Agent?
So, suppose a prospective listing agent starts to throw his sales statistics at you and you choose to ignore my advice about ignoring them? Then I suggest that you ask for the supporting detail about how these statistics were calculated. They should be able to quickly produce a list of all their closed transactions on which they base their claims and show you how they got their results. They should also explain the basis of their calculations. Did they calculate their metrics from the original listing with the original price or the last listing and the last price?
And if you are concerned that they might be cherry picking their data or miscalculating the statistics you can even call me up and ask me to check their numbers. I don't know how else to keep these folks in line.
#RealEstate #RealEstateAgents #MythsAndLies
Gary Lucido is the President of Lucid Realty, the Chicago area's full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think he's the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.