{"id":2709,"date":"2016-12-08T20:31:55","date_gmt":"2016-12-09T00:31:55","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=2709"},"modified":"2019-07-04T18:18:01","modified_gmt":"2019-07-04T22:18:01","slug":"real-estate-fakery","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2016\/12\/08\/real-estate-fakery\/","title":{"rendered":"Real estate fakery"},"content":{"rendered":"\n

\u201cFake news\u201d is the cause du-jour that has energized many into a movement to stop the spreading of falsehoods.\u00a0 Ironically, the crusaders who point their finger at alleged sources of fake news may also be guilty of promoting it; Fake news accusations are sometimes used to promote misinformation and half-truths.\u00a0 Unfortunately, fake news has become a meme that is becoming trite and meaningless.\u00a0 The promotion of fake news may be found throughout history, but real estate fakery is well established in the industry.<\/p>\n\n\n\n

Fake real estate news isn\u2019t always a manufactured story.  It is more often a story that is misleading.  When reporting real estate, the media typically sensationalizes a headline without reporting all the facts, which can make you draw inaccurate conclusions.  An example of this is when the local media report on rising national average home prices, giving the false impression that the local market is expanding at the same pace.  This is a mischaracterization of the local market because the regional data is often much different from the national trends.<\/p>\n\n\n\n

The National Association of Realtors\u00ae is sometimes guilty of real estate fakery too by stating conjecture as fact when explaining market deviations.  An example of this is when existing home sales declined about seven percent during February 2014 (March 20, 2014; nar.realtor).  It was explained away because of the poor weather and snow that occurred that month.  However, if snow is causal to poor winter home sales; then why was there a five percent increase in Montgomery County Home Sales during February of 2010 \u2013 when Snowmageddon and Snowzilla occurred? From “Real Estate, Climate Change, and Data-Porn<\/em><\/a>” :<\/p>\n\n\n\n

The National Association of Realtors\u00ae (realtor.org) March 20th<\/sup> news release reported that February home sales remained subdued because of rising home prices and severe winter weather.\u00a0 The decline in existing home sales was just 0.4% from January, but was 7.1% lower than last February\u2019s figures.\u00a0 NAR chief economist Lawrence Yun stated that home sales declines were due to \u201cweather disruptions, limited inventory, increasingly restrictive mortgage underwriting, and decreasing housing affordability.\u201d\u00a0 And although it may sound bad, Yun actually has a rosy outlook saying, \u201c\u2026Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.\u201d<\/p>

So, if a snow filled and cold February is to blame for poor home sales, was Snowmagedden and Snowzilla the reason for increased<\/i> home sales during February 2010?\u00a0 Of course not.\u00a0\u00a0 And although home sales increased 5.1% year-over-year here in Montgomery County MD during February 2010, it was mostly due to increased home buyer demand that some speculate was due in part to the availability of first time home buyer tax credits.<\/p>

Housing data cause and effect is only conjecture unless it is directly observed.\u00a0 To make sense of the \u201cdata-porn\u201d that is excessively presented in the media, often without proper or erroneous explanation; economic writer Ben Casselman offers three rules to figure out what the media is saying (Three Rules to Make Sure Economic Data Aren\u2019t Bunk<\/i>; fivethirtyeight.com): Question the data; Know what is measured; and Look outside the data.\u00a0 Casselman states, \u201cThe first two rules have to do with questioning the numbers \u2014\u00a0what they\u2019re measuring, how they\u2019re measuring it, and how reliable those measurements are. But when a claim passes both those tests, it\u2019s worth looking beyond the data for confirmation<\/i>.\u201d<\/p>

Consumers also perpetuate fake real estate news by exaggerating their (good and bad) experiences, usually offering unsolicited advice or posting to the internet (to real estate forums and websites).\u00a0 Facts are often distorted or misrepresented about specific real estate situations, such as divorce, short sales, and foreclosure.\u00a0 Unfortunately, people in similar situations who are looking for answers are at their most vulnerable; and can take the \u201cadvice\u201d as gospel, seeking a similar outcome with their transaction.<\/p><\/blockquote>\n\n\n\n

More real estate fakery on the internet comes in the form of fake reviews.  Fake reviews has been an ongoing issue for a number of years.  And although the online real estate portals have claimed to use artificial intelligence and other means to thwart the trend, fake reviews and those who provide them have adapted and have become more sophisticated such that it is increasingly difficult to spot.  Even back in 2011, Cornell researchers claimed that detection of fake reviews is \u201cwell beyond the capability of human judges\u201d (Proceedings of the 49th Annual Meeting of the Association for Computational Linguistics, pages 309\u2013319).<\/p>\n\n\n\n

From “Are internet Realtor\u00ae reviews real or fake?<\/a>“:<\/em><\/p>\n\n\n\n

The National Association of Realtors\u00ae (NAR) code of ethics prohibits deceptive practices, which includes posting or encouraging fake reviews. However, Lani Rosales of AGBeat (Sketchy new trend \u2013 hiring fake online review writers) argues that there has always been an element posting fake Realtor\u00ae reviews and testimonials.<\/p><\/blockquote>\n\n\n\n

Scammers and fraudsters also use fake real estate news to their advantage.\u00a0 Fake real estate listings have been an issue since the inception of the internet.\u00a0 Fraudsters publish pictures and information from a prior sale or rental, or may lift the photos and information from a legitimate listing being marketed by an agent.\u00a0 The con is to have the consumer send money, often before the home can be seen.\u00a0 Craigslist warns consumers: \u201cAvoid scams, deal locally! DO NOT wire funds (e.g. Western Union)<\/em>, or buy\/rent sight unseen.\u201d<\/p>\n\n\n\n

Real estate agents are also culpable for spreading fake news, which may be why agents are often characterized as being fake or phony sales people who will bend the truth to make a sale.  Of course there are some in the industry who fit the stereotype, but many are \u201cstraight shooters.\u201d  Unfortunately, it is common for agents to use puffery to make a home seem nicer (until you visit it and realize the \u201crustic charmer\u201d is a neglected home<\/a>).  Not as often, agents may create a history for the home that is not real to promote a lifestyle or even hide relevant defects.<\/p>\n\n\n\n

When it comes to real estate news, advice, and listings \u2013 don\u2019t take anything for granted.  Don’t fall prey to real estate fakery – know the source, and verify the information with a local real estate professional or your real estate agent.<\/p>\n\n\n\n

By Dan Krell
Copyright \u00a9 2016<\/p>\n\n\n\n

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Disclaimer<\/a>. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cFake news\u201d is the cause du-jour that has energized many into a movement to stop the spreading of falsehoods.\u00a0 Ironically, the crusaders who point their finger at alleged sources of fake news may also be guilty of promoting it; Fake news accusations are sometimes used to promote misinformation and half-truths.\u00a0 Unfortunately, fake news has become … <\/p>\n

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