From Gary Watts, economist for the Ocean County Association of Realtors (California):
Mid-Year Economic Outlook for Real Estate
B. Listing Agent Advice
1. Price Reductions: Please do not put a “price reduced” banner on your listings, and if you have one up, please take it down. It “falsely” advertises to the neighborhood that prices in the area are going down. What is more true is that sellers are lowering their expectations and becoming realistic.
Plus: For we who show property, it does not instill confidence in our potential buyers.
2. Sold Signs: When the listing goes into escrow, please put an “in escrow” or “sold” banner on the sign! The days of a panicked buyer, desperately looking on their own for a home, are long gone. Once again, we are advertising to the neighborhood the wrong information.
Plus: Imagine how potential buyers feel seeing all those for sale signs. Do you really think you’re helping them enter the market?
3. Signs: If you have a listing where there are other (or many) for sale signs nearby, I would recommend that you call the other agents and see how many of them will remove their signs from their listings. At the very worst, rotate your signs until one (or more) of the listings sell, then make sure it has a sold sign on it!
Hat tips go out to:
Gary Watts and the Incredible Logic Shrinking Machine
and
“Price Reduced” Signs Give Buyers the “Wrong” Message
Caveat Emptor!
Grim
It does not falsely advertises to the neighborhood that prices in the area are going down.
THEY ARE!!!!
Sounds like a lot of work rotating signs and all.
I want to go back to the days of no work required to sell a house.
Here comes all the ‘motivational speaker’ type articles that you would expect to see in a falling market.
I’m shocked that there was no mention of applie pie, though.
-Richie
Grim, et.al.
Some of these violations are reportable to the FTC, I believe, under anti-trust. Wouldn’t sign manipulation be considered collusion?
Has anyone sent this to:
http://www.ftc.gov/bc/realestate/index.htm
FTC Contact:
Patrick J. Roach
Deputy Assistant Director
Anticompetitive Practices Division
FTC Bureau of Competition
601 New Jersey Ave., NW
Washington DC 20580
202 326 2793
Email: proach@ftc.gov
Pat
Realtors should wear plaid jackets.
As the hundreds of realtors scramble for the 4-5 Greater Fools who will buy at these inflated prices, look for the shady tactics and deceit to get even worse.
“What is more true is that sellers are lowering their expectations and becoming realistic.”
More true? Less painful to say does not = truer.
From Reuters:
Philly Fed sees slower growth, faster inflation
Growth in U.S. real output over the near term looks slower but inflation a bit higher than they did three months ago, according to a survey issued by the Philadelphia Federal Reserve Bank on Monday.
51 forecasters pegged current-quarter growth in real gross domestic product at an annual rate of 2.7 percent, down from 3.1 percent in the previous survey and not up much from 2.5 percent in the second quarter.
Growth in the fourth quarter was pegged at 2.9 percent, down from the forecasters’ previous estimate of 3.0 percent.
The panelists raised their projections for consumer price index inflation over each of the next four quarters.
They now think CPI inflation will average an annual 3.6 percent in the third quarter, up a full percentage point from their previous estimate of 2.6 percent.
The full survey can be found here:
Survey of Professional Forecasters – Q3 2006 (PDF)
Pat,
I was just thinking collusion too, but you beat me to the post. You can do whatever you want with your own sign (i.e. “new price” instead of “reduced”), but Point 3 sounds like colluding with other market participants to create the appearance of tighter supply, with the intent purpose of misleading buyers into artificially supporting higher prices. This is anticompetitive and contrary to a free, open and transparent marketplace.
Since NAR has such a strong commitment to ethics, I think an ethics complaint might be in order here. Obviously such an upstanding organization like NAR wouldn’t tolerate collusion.
Don’t get uspet over this clown, he’ll be back in the woodwork when the market drops like a rock
In addition I read a section in the piece that says “if sellers really don’t need to sell they should pull there homes of the market.” This is some pityful attempt to manipulate the market by lowering the supply. It sounds nice but in reality if only the motivated sellers were out there they would under-cut the market.
If sounds counterintitutive but if you really need to sell in a buyers market they (sellers) would be more likely to capitulate to the buyers needs (selling below asking price) putting downward pressure on the market. Then when others in the future want to sell, buyers will go to the comps for a baseline on a reasonable bid. Then the seller gets whacked!!!
To contact Gary Watts directly please visit
http://www.impactre.com/contact%20us.html
5:21: Advising your clients not to sell unless necessary, and of the importance of transactional timing would be part of a professional’s job.
However, removing or colluding to remove signs from homes that are actually for sale may be tampering with a commonly-accepted communications method in an industry heavily-dependent upon signage.
“The antitrust laws in general, and the Clayton Act by its express terms, forbid conduct that may substantially lessen competition. The Congress (through antitrust exemptions) or individual states (through legislation invoking the “state action” doctrine) may decide that competition should be replaced with price-regulated monopoly or oligopoly in particular segments of the economy:
http://www.ftc.gov/bc/1bbbr.htm
http://www.usdoj.gov/atr
/public/guidelines
/disaster_primer.htm
Pat
Sheesh.
I feel like I’m gonna need another recipe for Horse Head after this one.
Pat
Did any notice that all of the uproar about 5 trillion in cash in this guys post? That comes out to a shade under $40,000/household (using 130 million households. That means the average person should be able to afford a 20% downpayment on a 200k house. So why aren’t we all running out to put our trillions of $$ into our homes? (Sarcasm!!)
what a crooked unethical industry.
To be fair, let’s keep in mind that each year sellers have been pricing their homes higher. This year, buyers are balking at the higher prices. So when he says that “sellers are lowering their expectations and becoming more realistic” his version of “realistic” might be sellers not pricing higher than they did last year. That’s not a drop, it’s a leveling off. Personally, I agree with many on this blog who believe we’re in for double-digit decreases–but we’re not there yet. So I don’t think this particular comment of his was purposely deceitful.
Outsource the realtors to Iraq and Lebanon – plenty of opportunities created there by the US.
I guess the price reduced signs should be replaced with “Expectations Reduced!”