Shouldn’t real estate ads be based on facts? – Silicon Valley
Q: Real estate agents in our neighborhood are valuing properties hundreds of thousands of dollars below comparable sales. We live in an expensive enclave of suburban homes known for its good schools. The knowledgeable seller’s agent we hired to be our listing broker competently appraised our home for sale. In need of refreshing, the property is on the busy street that feeds into the neighborhood, and the price reflects this inescapable fact. After our home was put up for sale, three renovated homes within the neighborhood were put on the market at or below our list price. My husband is apoplectic. We have valued our house on the basis of facts.
We have learned that surprisingly low priced properties are a rare but deliberate tactic. The goal in our area is for seller’s agents to later brag about selling a property for $ 250,000, $ 350,000 or more above the list price after receiving a ridiculously large number of offers. In the meantime, our ad – which doesn’t sell – appears to be overpriced depending on condition and location. Are house prices significantly under-priced by 5-10% based on comparable sales, considered acceptable behavior by your trade associations and the state real estate department?
A: In some areas, the adequately priced Bay Area listings received higher bids for the median house price in each of these categories: the US, California, and Santa Clara County. For example, according to the US Department of Housing and Urban Development, the median price of homes in America for the second quarter of 2021 is $ 374,900. The California Association of Realtors reports that the existing, median-priced single-family home as of July 2021 in California was $ 811,170 and in Santa Clara County, $ 1,670,000.
I have written about this questionable practice of deliberately priceing properties incredibly low. This is a practice frowned upon by most rookies and veterans of the real estate community. I’ve heard complaints from disgruntled potential buyers who knew something was wrong with them being new to home shopping. Conversely, many neighborhoods have residents who know which selling agents are pricing significantly lower than comparable sales.
Again, I consulted with a real estate lawyer who warned me not to give legal advice as a real estate broker. As always, real estate lawyers tell me this is an opportunity to enter the arena of false advertising. See the problems in Section 1 of the California Business and Professional Code. False advertising in general 17,500 BPCs here.
Worse yet, the hosts of the open houses inform potential buyers that the property will sell for a predetermined price well above the advertised price. This kind of first-visit dialogue with potential buyers is the worst of first impressions.
Questions? Real estate agent Pat Kapowich is a licensed real estate brokerage manager and a lifelong consumer protection advocate. 408-245-7700, [email protected] DRE # 00979413 SiliconValleyBroker.com YouTube.com/PatKapowich