Trick Photography?

5229 Duncraig Road in Edina Highlands

In a post earlier this week (The Far-Away(?) Buffet), I discussed clues that something "just isn't right" in a particular photo.

So, is the apparently huge Living Room shown above for real?

You 'betcha.

The MLS dimensions are 27' x 17', or 459 square feet -- that's the size of some one bedroom houses in South Minneapolis.

Meanwhile, the huge Living Room is consistent with the huge house it's in -- almost 6,800 square feet (address: 5229 Duncraig Road, in the Edina Highlands neighborhood off Vernon; listing agent is John McDonald).

I'll see the rest of it a half hour from now, when I attend Edina's weekly Exceptional Properties meeting . . . likely in this very same room.

Surprising Obstacle to Virtual Staging

Not So Virtual "Virtual Staging"

So, what's holding up virtual staging? (see also, "Virtual Staging: Ready for Prime Time?")

Not Realtors, who by and large are game (even if they have to dig a little deeper into their pockets to do it).

Not clients, who stand to save a small fortune on actual staging costs.

And not local Boards of Realtors, who as best I can tell are behind the curve addressing the issue -- but have hardly forbidden the practice.

Give up?

The virtual staging companies themselves.

(Legal) Boulders in Road

I'm in the process of doing virtual staging for the first time, and was eagerly awaiting a phone call from the (Atlanta-based) vendor, who contacted me Monday.

"Can you give me an idea what would you like the rooms to look like?," he asked.

By way of introduction, I explained that the home has a traditional look and formal floor plan, so therefore the furniture choices and arrangement should reflect that.

However, my highest priority -- and the reason I was popping for virtual staging -- was to be able to show prospective Buyers how the house would look without the dated, loud wallpaper -- and with the oak hardwood floors uncovered (now obscured by equally loud, decades-old carpeting).

"Check on the furniture, but can't change the flooring or wallpaper," the virtual stager told me flatly.

Litigation Risk -- And How to Avoid It

"Huh?!?," I said incredulously.

Due to litigation risk, he explained, the company's policy is not to alter a room's physical attributes, only to show how it would look with furniture and accessories added.

For a virtual staging company, isn't that like tying 1 3/4 arms behind your back?

Or, as Henry Ford might say, "you can have any color Model T, as long as it's black."

"One Size Fits All" Policy, For Now

I proceeded to explain that I am a former lawyer, and had no intention of using the staged photos in a misleading or deceptive fashion; or getting myself, my broker -- or them -- sued.

Specifically, I said that I would:

a) stipulate that I would not use the photos online or in MLS marketing materials, but only as "blow-ups" that I would display, physically, in each of the rooms, to contrast the "Before" and potential "After" appearance;

b) understood that each of the blown-up photos would be stamped with a conspicuous "virtually staged" disclaimer; and

c) would present prospective Buyers and their agents with a written acknowledgement for them to sign before entering the home and doing a showing.

What Buyer could claim that they'd been deceived after complying with all that?

"No go," came the quick answer.

Clearly, the virtual staging companies are risk-averse, and don't want to be in the business of policing how Realtors use their photos once their computer whizzes (electronically) ship the photos out the door.

I get that.

But by declaring the best applications off-limits -- at least for now -- the virtual staging companies are very much undermining demand for their services.

"'Possible' Short Sale"

Warning: Use of "May" May be Problematic

For the uninitiated, let me decode "possible short sale":

The odds of it not being a short sale are about as high as the following bad things not having occurred (which is to say, infinitesimal):

"I may have scratched the car." (wife to husband -- or vice versa)

"The disposal may not be working right." (child to parent, after dropping rocks into same)

"We may have lost your reservation." (uttered at the car rental desk)

"The plane may be delayed."

"We may have damaged your one-of-a-kind, antique lamp." (furniture movers to customer)

"Mommie, I think something may be wrong with the goldfish."

The kiss of death?

A "possible short sale" being handled by "an experienced short sale agent."

P.S.: It's interesting how many of the above are travel-related. Hmmm . . .

"Uptown West Apartments"

Make that,
"Uptown Very West"

"Close only counts in horseshoes and hand grenades."

I'd actually add a third category to the above: real estate developments.

So, once upon a time when I lived in Manhattan, I rented an apartment at One Columbus Place, that was neither "One" nor on Columbus Circle, its putative namesake.

In fact, One Columbus Place and its next-door sibling, Two Columbus Place, were both about two blocks -- and one very major Manhattan avenue -- to the west.

Stretching the Envelope?

To that genre, now add "Uptown West Apartments," located in St. Louis Park just east of Highway 100 and north of Highway 25 (Highway 7 to us old-timers).

The new signs in front loudly announce the complex's new name, along with the fact that it's under new management (the latter explains the former).

So, is the name merely "stretching the envelope" -- or tearing it?

Put it this way: if you're at least contiguous to the area you're claiming proximity to -- think, West Virginia and Virgina -- you're stretching the envelope.

However, when you're almost three whole neighborhoods away (in this case, Sunset Gables, Fern Hill and practically all of St. Louis Park's Triangle neighborhood) . . . I'd argue you that you're tearing it.

Online "Bait and Switch"

Searching for "MLS," Getting "TheMLSonline.com"

One might think that BobMenendez.com would be the Web site of Senator Robert Menendez of New Jersey, chairman of the Democratic Senatorial Campaign Committee. But no. Sharron Angle, the Republican candidate for the Senate in Nevada, has the site, which her campaign uses to bash Democrats.

--Marc Lacey, "Clicking Candidate.com, Landing at Opponent.com"; The New York Times(9/15/2010)

The phenomenon referred to above, called "cybersquatting," is hardly limited to politics; it's rife in real estate, too.

Locally (in the Twin Cities), the best known example of that would be TheMLSonline.com, which, unbeknownst initially to the visitors it attracts, has nothing to do with the local MLS ("Multiple Listing Service").

The MLS is the mother lode of Twin Cities listings, paid for (and only accessible) to Twin Cities brokers and their dues-paying agents.

TheMLSonline.com is just one of hundreds (thousands?) of Twin Cities real estate brokers.

Somebody who's practiced law more recently than I have (not since 1992) has to explain to me why that doesn't constitute a deceptive trade practice -- which, last time I checked, was illegal.

P.S.: if you don't like the practice, vote with your feet and don't use TheMLSonline.com (there --that's my protected free speech!).

"Cedar Lake Specialist" . . . Really?

Inflated Realtor Claims

Does one sale make you an "area specialist"?

That's the claim being made by a Coldwell Banker Burnet agent who just sold a home about a block from where I live near Cedar Lake in Minneapolis.

The agent's flyer, which was just left on my door, trumpets "Just Sold" above a photo of the home, with "Cedar Lake Specialist" beneath the agent's headshot.

Neighborhood Specialist . . . Everywhere

The agent, who represented the Buyer, is trying to capitalize on the sale. Nothing wrong with that -- Realtors do it all the time.

However, wouldn't a "Cedar Lake Specialist" logically work out of CBB's Minneapolis Lakes office, just a few blocks away?

Or at least Burnet's Minneapolis Parkway office, a few miles southeast but still close to the lakes?

Nah.

In small type, the agent's flyer indicates that he's in Burnet's Edina Regional Office, a good 10 miles south (and a lot closer to Bloomington than Cedar Lake, Lake Calhoun, etc.)

How much do you want to bet that this agent is soliciting business in Bloomington, Eden Prairie, etc. claiming to be a "neighborhood specialist" in those areas, too?

Era of Come-on's & Chippy Fee's

It's All About the ***Asterisk***

I usually let it pass unremarked, but the latest come-on in my mailbox is too good (bad?) to not pass along. (I won't reveal the name of the company, but it rhymes with Schmifetime Schmitness.)

In big, bold letters at the top of the letter:

Rejoin for $0 Enrollment Fee and get a Free $85 gift voucher when you rejoin by Monday, August 31.*

So, what does the *asterisk, in microscopic type at the bottom of the letter, say? "An administrative fee applies to all memberships."

Just coincidentally, it happens to be . . . $85!

Gee, I wonder if they offer credit cards???

Foreclosure "Bait & Switch"

One-Item "Bait & Switch"

Bait and switch (noun): 1 : a sales tactic in which a customer is attracted by the advertisement of a low-priced item but is then encouraged to buy a higher-priced one.

--Webster's dictionary

Can "bait and switch" ever involve just one item?

I'd argue that it can.

Normally, of course, there's the low-priced "bait." When that's unavailable -- and it's always unavailable -- the customer is presented with the much more expensive "substitute."

With many foreclosures lately, it certainly would appear that the "bait" instead consists of the artificially low list price dangled in front of the public.

The "switch"?

The real -- and dramatically higher --price.

How much higher?

That all depends: on how many bids come in; how motivated -- and flush -- the bidders are; and on how many rounds of manipulative bid-raising they'll tolerate before they storm off.

If you want to auction off the property, fine, but then do it in public, and don't call for "highest and best" offers.

Bank Shareholders Cum Taxpayers

So what's so bad about all this? Two things.

One. Listing a $100k home for $50k (or $25k) is deceptive advertising. (See, "Sold Price: Almost 5x Over Ask").

We don't let automakers, pharmaceuticals, or cigarette makers (er, scratch that one) engage in such practices -- and we shouldn't let banks selling foreclosures do it, either.

Two. The banks own the foreclosures, but who owns the banks?

If it's a busted, toxic lender like Washington Mutual, Countrywide, or IndyMac, the answer is: us. That's because the government brokered their sale -- or what was left of their carcasses -- to mega-banks kept alive by taxpayer bailouts. Of course, that was after the FDIC -- taxpayers again -- made depositors whole.

Bank shareholders cum taxpayers have an interest in seeing that foreclosures are expeditiously sold off in a manner that is fair, transparent, and serves to maximize each home's selling price.

Instead, in many cases the process appears to be opaque, rigged, and designed to repel any Buyer unwilling to play the required games.

"Made 'Ya Look" Marketing

The Real Point of Online Photos

Real estate photography, as it's currently practiced, reminds me of the joke about two hikers who encounter a Grizzly in the woods.

The first hiker thinks he has to outrun the Grizzly. The second, smarter hiker realizes that his task is to . . . outrun his companion.

So, too, the object of online photos of a given property is not to get you to buy the property. Even at the peak of the housing market, in the hottest locales, very few people were buying, sight unseen, purely on the strength of online marketing materials (and 100% of those likely regretted it).

If the point of marketing photos isn't to sell a home, then what is it?

To get you in.

It's axiomatic that if you don't tour a property, you're not going to buy it. And if you don't see it in person, there's no chance for you to fall in love with the amazing built-in's, the cozy Kitchen nook, or the lovely gardens in back. (And no chance for the listing agent to engage with you -- or your Realtor -- about what you're looking for, your budget, time frame, etc.)

Unfortunately, simply getting prospects in to a home only to be disappointed once they get there is to win the battle, but lose the war.

In my experience, the single best way to sell a home is to exceed a Buyer's expectations.

Getting a prospect in to a home using borderline false pretenses is guaranteed to sow disappointment (if not anger).

That reaction is the opposite of the mindset that leads to a deal.

Eight Months Later: Deal . . or No Deal?

Where: 29XX Quentin (St. Louis Park's Fern Hill neighborhood)
What: 3 BR/3BA; *3,937 FSF. Year built: 1936
How much: $379,900
On Market: 7/23/08

I originally profiled this home way back in July, when it first came on the market ("Too Good To Be True"). The question I posed -- "4,000 FSF by Cedar Lake for $380k? Not So Fast" -- said it all. In fact, I estimated that the actual square footage was closer to *2,100 FSF.

So what happened?

Nothing -- or shall I say, "no deal."

After one, $10,000 price reduction in September, the listing expired in January.

Although a tough housing market certainly didn't help, exaggerating the square feet so much likely sealed its fate.

Deceptive Advertising

"Auction Today"? Not Exactly

I spent a good chunk of today's broker tour going through a 90 unit condo project in St. Louis Park. (If you didn't know, Realtors spend a part of each Tuesday looking at all the new properties on the market, in a ritual called "Broker Tour.")

The condo complex caught my eye because a unit in the building looked like a good fit for one of my clients.

However, once I got to the building, all I saw were very big, very conspicuous signs announcing "Auction Today." It seemed odd: the building was empty, there were no cars in the parking lot, and yet there was supposed to be an auction?

It turns out, the company's Web site is:

wwww.AuctionToday.com

Be honest -- did you notice the "www" and the ".com"? And yes, all that signage did get me to look at the condo's that are going be auctioned (bidding's an entirely different matter -- but that's the subject of another post).

It reminds me of a Mad magazine cartoon, vintage 1968, where a would-be playboy goes around trying to entice women with the line, "I named my new yacht after you." Sure enough, the last frame of the cartoon cuts away to the name plate on the boat: "After You."