FrontDoor's Real Estate Do's and Dont's

Homebuyers, Beware of 'Lying Listings' on Market

By Jay MacDonald, bankrate.com | Published: 8/06/2009

Jon Boyd, an exclusive buyer's agent and broker for The Home Buyer's Agent in Ann Arbor, Mich., recently showed a self-described "stunner" to one of his clients.

"The only thing that would 'stun' anybody about the house was how bad the previous owner did the work to ensure that every room would need to be redone," Boyd chuckles. "I don't know what was going through the listing agent's mind to say that."

Presenting all homes, even the nightmares, in the best possible light is part of the listing agent's job, of course. Most buyers know this and view colorful descriptions with a healthy skepticism.

However, the collapse of the U.S. housing bubble and the nation's subsequent slide into recession have inspired blarney that stretches the limits of credulity, Boyd says.

"These days, with the greater demands on the market, we probably are seeing more strangeness and stretching the truth," Boyd says. "It's frustrating for buyers when the expectation and the reality are two totally different things."

Yes, Realtors are desperate to sell homes in a stagnant market with mounting inventories. But descriptions of houses these days can be flat-out inaccurate.

"We routinely run into transactions now where the listing agent hasn't physically been in the house," Boyd says.

This is especially true in short sales and foreclosures, he says.

"On foreclosures, the bank that's in another state will often pick a low-bid real estate company that is in a different community than the house is," Boyd says. "The bank hires a property management company to put a lock box on it and the real estate company writes up their description based on whoever they sent to take a few photos of it."

Because most agents represent buyers and sellers, they know how to write -- and how to translate -- the code words.

"We buy with our feelings," says Jay Izso, a real estate behavioral psychology specialist. "These words and phrases are designed to get you in the door, but not much more."

Izso says the flattering phrases serve another purpose close to the listing agent's heart: pleasing the seller.

"If I accurately call a guy's house a dump, how long do you think I would have that listing?" he says.

Boyd, a past president of the National Association of Exclusive Buyer Agents, or NAEBA, was so amused by these codified euphemisms that he compiled a translation guide with the help of NAEBA members nationwide.

For example, he cites the commonly used term "cozy" and says the connotation to savvy Realtors is that there isn't much space in the house.

"It triggers the Henny Youngman in us: 'This house is so small that you have to go outside to change your mind,'" Boyd says.

Boyd says that although some of these phrases can be taken to extremes, a little hyperbole is not necessarily a bad thing for buyers.

"I would rather take the time to show a buyer an extra five houses that they don't want because it's too cozy or smells bad or whatever so that the buyer has a better reference on what they are getting and the compromises to make on the house they do choose," he says.

The industry acronyms he's more worried about these days are "BATVAI" and "IDRBNG," which stand for "buyer's agent to verify all information" and "information deemed reliable but not guaranteed."

"We're seeing more and more of those listings now," says Boyd. "The idea is that the listing office doesn't want to take responsibility for actually measuring the property or adequately describing it.

"Sometimes, they don't even visit the property. They just put down the information from the assessor's records and put it on the market and say it's the buyer's agent's problem to verify it."

Izso says the Internet and the explosion of mobile devices like smart cell phones largely have made listing comments irrelevant.

The National Association of Realtors' 2008 Home Buyer and Seller Survey found that 87 percent of homebuyers use the Internet to search for homes. Nearly as many buyers (32 percent) first learn of a listing online as from their real estate agent (34 percent).

Now that buyers can easily view the condition of the roof, siding, lawns and surrounding neighborhood from overhead or street level on Google Earth and many MLS Web sites, what's the point of obfuscation?

"Today's buyer wants the facts, not the fluff," Izso says. "When they pull up in front of a listing, they're on their iPhone to retrieve the hard data from the MLS.

"Back when buyers shopped through the classifieds or real estate magazines, the sales pitch was the first thing they read. Now it's the last thing they read, if they read it at all."

Distributed by Scripps Howard News Service. Reach Jay MacDonald at editors(at)bankrate.com

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