Sunday, February 25, 2007

Should You Trust Local Real Estate Ads?

Should you pick your Real Estate Agent for your next purchase or sale from an Advertisement in Your Local Newsletter/Newspaper?

The easy answer is that no, an answer that can make the difference in thousands of dollars of unnecessary cost/lost income needs more research than just what you get by seeing an ad. In theory at least real estate agents advertise because they believe those ads do help influence us into choosing their services, but should they? What follows below is a road map that just about anybody can follow to see with how large of a grain of salt they take when considering their local real estate agents.


As recent purchasers of a home shortly after what had been a peak in local home values, we are more than casually aware of the current softness in the market, and so try to pay at least some attention to recent sales trends so we have it in the back of our heads should we ever need/choose to start looking to move. But then each month I saw the real estate ads in our local community newsletter, the All Fairlington Bulletin put out by the Fairlington Citizens Association, and the journalist in me kept wondering just how creatively the local advertising community might be in trying to avoid discussing the reality of a market where property value assessments went over the course of 1 year from a 19 percent increase from the previous year to a 5 percent decrease.

Finally, I took advantage of the public records on real estate sales in Arlington County and Alexandria City Virginia, and used them to compare to the sale dates of trumpeted in the ads, with the assumption being that they are the recent successes from agents and agencies represented.

First of all, one doesn't undertake such an adventure without at least some healthy skepticism over the difference between reality and how what may be an unscrupulous advertiser would portray it. That being said, honest advertising is really the best, easiest method of the consumer getting some basic information in their hands about something like this, as it engenders a basic sense of trust in the agent with a clear communication of the kind of results to be expected.

That being said, anything that feels weaselly, depresses that, so what did I find?

This was from the March 2007 All Fairlington Bulletin

Page 4 (Bonnie B Remax 100, www.fairlington.com)
$590K 200 Uhler terrace (actual sale date: 12/06/06)
$460K 3425 S. Wakefield St (sold: 9/29/06)
$400K 3501 S. Wakefield St (sold: 9/22/06)
(no price) 3021 S. Buchanan St. (sold for $386k on 11/20/06)
$463K 3609 S. Wakefield St. (sold: 6/20/05)

Page 6 (Lois Robinson and Lynn Gant, www.loisandlynn.com)
$434,900 4618 S. 36th St. in Mews ("listed Sunday, Sold Monday")(too current for web)
$410k 4247 S. 35th St. in Meadows (too current for web)


Page 8 (Tom Team, www.thetomteam.com/www.fairlington.info)
$579K 3548 S. Stafford (5/26/06)
$465K 3445 S. Wakefield (6/22/06)
$476,100 3276 S. Utah Street (5/25/06)
$455 4458 S. 36th Street (6/9/06)
$464K 4113 S. 36th Street (5/26/06)
$505k 3473 S. Stafford (6/8/06)

So it's clearly a slow market, but why would the "Tom Team" still be referring to sales 8 and 9 months ago? And for that matter, why would "Bonnie B", who otherwise had sales in the last couple of quarters, all of a sudden throw out a number also from 9 months ago?

Just for the heck of it, I checked the February "Tom Team" ad and found only 1 listing different from the March issue, and it was for a more recent sale: $447,900 4436 S. 26th St. (sold: 11/15/06).

So before you get too wound up about the sales numbers spouted on an ad, do a little research, and if you feel mislead at all, you probably want to think twice about using them, and an advertiser should know that. In order for advertising to work for a business, it needs to at a minimum not your customers uncomfortable with dealing with you, like somehow they're being misled. If advertising fails, than little newsletters like our "All Fairlington Bulletin" will have to struggle that much more to make ends meet.

Finally, this posting is meant to be instructive to both consumers, advertisers, and small publishers like myself. The consumer advice was above. My advice to advertisers is to remember that in the internet age, every potential customer has the tools to find out much more about you with you ever knowing today than ever before, and if your business works with public records like real estate sales, there is even more hard data to be found. Expect that somebody is going to check your numbers and if something looks really out of whack, like 9-month-old numbers with no indication of this important detail, they might take the 15 minutes to post a note to all of their friends and family questioning your motivations and integrity. As anybody who has ever posted anything remotely controversial online has found out, internet judgement can be swift and severe, and sometimes unfairly so, so best to be as open and honest with your customers as possible.

And for small publishers, we need to take the responsibility to actively review anything that goes into our publications and give our advertisers the benefit of our insight into any potential negative reactions our audience might have. Theoretically that is one of the benefits that we provide to the advertisers, not just a passive audience, but active engagement in how to best communicate with them.