Beware the Hype Factor from Real Estate Sales Persons

In reading the real estate section of my local paper today (San Diego Union-Tribune, Sunday Edition, May 18th) I came across an article which sorta irked me. The longer I thought about what the author had to say in it and the more carefully I read it, I progressed beyond just being irked to a state of indignation for I felt I had been ´hyped´ at the least if not lied to. Decided to contribute to ´the rest of the story.´

The article I refer to was in the buying guide (SD Homes) of the classified section. In small print on the second page there is an advertising disclaimer. I feel the paper was negligent in not requiring the author of this blatant hype article, which is on page 1, to stamp in bold letters ADVERTISING on the top and bottom of his presentation since it clearly is not an unbiased and factual representation of the current real estate market in San Diego County. And probably not in your area either.

I don´t mind professional people trying to ´sell´ their product, homes in this case, as long as that person abides by the rules of fair play and truth in advertising. That has not, in my opinion, been done here. Instead we have ´hyping´, and selling the idea of ´now is the time to buy your dream home´ in a manner approaching fear mongering. ´Why, if you don´t buy right now,´ the author and his cohort seemingly hint, ´you´ll miss out on the market which is rising as we speak.´ Not exactly their words, but you get the idea. We´ve heard it before when realtors feel the crunch of severe market declines in their own wallets. Pure and simple overstating the case with the hoped for result of moving buyers off the sideline into the market. For the buyers own good? Or, for the purpose of getting a few dollars in commissions? You decide. Better yet, read the piece and do some further research by independent real estate professionals and see if I am mistaken in my suspicion of the latter.

The writing I refer to (Waiting to buy is a risky business) is by Steve Rodgers, President and CEO of Prudential California Realty. In it he paints a relatively rosy picture of the real estate market in San Diego. He makes such innocuous statements as "market stabilization (??) has been quietly occurring all over the country." (Not!) And, "As home prices are steadying and rising in some areas, waiting to buy becomes a more costly option every day." (Confusing you? Did me.) Further, Steve writes "April was a pivotal month…asking prices fell just a half percent…." (Doesn´t that mean they are still falling and not rising? Shouldn´t I wait a bit more for a better deal? Will prices continue to fall?) And, as Steve well knows, ´asking prices´ mean squat. Closing prices are the key to the market and they have been falling precipitously. Steve doesn´t give you a clue as to their prognosis although in fairness he should.

The real kicker in the article is that he uses one of his own agents, Steven Campbell, an agent in the Prudential California Realty office in Rancho Bernardo, to embellish his own hype. "The market appears to be trending toward stabilization," says Steven. (Gee, isn´t that an unequivocal and clear statement of the situation? Makes me want to grab my wallet and run right over to their office lest I miss out on the ´boom´ once again. By the way, what in hell did he just say?)

But wait there is more pontificating and cajoling. Steven Campbell continues, "As home prices begin their upward trend, the waiting game for potential buyers becomes more risky." (Wow, now I am really scared!) "How much longer can you afford to wait?" asks Steven. "Right now is proving to be a great time to buy because of a combination of things," continues Campbell, "Prices are slowly coming back into focus." (Someone please explain that last bit to me?? Sounds like real estate Orwellian double speak to me?)

Well, I won´t belabor the point; suffice to say that is pure damned unadulterated hype and little more. Campbell ends his pitch with, "With the market moving in its historical upward swing, many consumers will find that now, more than ever before, is the time for the American dream of home ownership." (Steven, may I suggest to you - without hesitation - that it is you who is dreaming, not the American homebuyer.)

The facts are that the housing market nationally, as well as in San Diego, is not at a bottom and it will be many months before it is. Inventory is up for both new and existing homes and increasing monthly as homes remain on the market for extended periods, foreclosures will continue to be added for many months to come to an already overblown inventory of homes, and you can bet that, while mortgage rates remain low, qualifying to buy a home will be more stringent than in many years. There will be no more no – money – down, low interest loans similar to those of the irresponsible lending policies of the first half of the 2001 decade.

I don´t begrudge a good, hard working sales person their five minutes on the clock to try to induce me to buy a product; I do require, however, that they be forthright in their efforts to do so. And there are many realtors out there who will provide honest and complete advice to you on perhaps the largest purchase of your life. They won´t use overblown puffery and fear tactics to induce you to buy. Not if they are a GOOD real estate agent working for you and not for themselves. Not if they are unselfish and possessed of ethics.

Such notables as our own local Data Quick, a real estate analyst company, and others of considerable prestige and knowledge of the real estate market here and elsewhere contradict nearly Rodgers´ entire ´happy face´ outlook for now. They are not peddlers of gloom and doom, but there are the facts to consider. The San Diego real estate market is not in an upward spiral and won´t be any time soon. Do not be caught up in such overzealous hype that you commit before you are ready; buy a home when it suits you, not when your real estate agent is ready because they need money and your buying provides them with it.

Mr. Rodgers is in a lofty position as President and CEO of a very influential real estate company. However, his spin here in this case is more like the Mr. Rodgers of TV fame. A nice fairy tale for bedtime. He knows better in this time of many hurting home sellers and financially strapped buyers than to toy with the facts for whatever reason. Sell real estate Rodgers - that is your job - don´t hype it!

I recall two movies I enjoyed a few years back both of which addressed sales and ethics. One was "The Flim-Flam Man" and the other "The Rainmaker". Both involved loveable ´con´fidence men who traveled around to small towns looking for suckers to chisel out of money. Both are in book form and I suggest them to Mr. Rodgers of Prudential California Realty.