Apr 9, 2010

Fuzzy Math in Real Estate

My neighbors and I got interesting letters yesterday from a respected real estate broker in our area. The letter (addressed: Dear Preston Hollow homeowner) boasts how this broker and his team of agents are 'bringing the buyers' in Preston Hollow. It proclaims in bold text these statistics:
  • 63% - In the past 4 months, almost two-thirds of the homes SOLD in your neighborhood were listed with ... (this company).
  • 246 - The average Days on Market of homes sold in your neighborhood in the past four months by our competitors.
  • 81 - The average Days on Market of homes sold in your neighborhood in the past four months by ... (this company).
Wow! Their competitors must really stink. Oh, wait a minute. That's me! I must be with the wrong outfit. I should hightail it over to their offices and see if they'll hire me. But maybe I should check out their statistics first.
For arguments sake, let use the boundaries of Preston Hollow as Royal Lane on the North, Northwest Highway on the South, Hillcrest Road on the East and Midway Road on the West. This would include the area of homes priced over $1 million where this brokerage claims to be "stronger than any other residential real estate firm".
Oh my. A search of all properties in MLS brought up some very different statistics. I even narrowed the search to a smaller area (my neighborhood). But that only made things look worse for this company.
In the past 4 months there have been 46 sales in this area (the larger 'Preston Hollow' area noted above). This brokerage had listed 11 of those sales. While that's an impressive percentage, its not 63%.
The average Days on Market for all 46 sales was 164 days. The average Days on Market for this company's 11 sales was 163.5 days. It doesn't take a CPA to figure that one out either.
Like I said earlier, this is letter came from a reputable broker. Which is why it is so disappointing to read such a blatantly misleading solicitation. If you want the real stats in Preston Hollow, come back in a week and I'll have them posted.
[where: 75230]


Jeff Duffey said...

Whoever sent that must have either just graduated from real estate school or some office manager had one of their "special classes" for the agents.

Furthermore, I'd be more interested in what the AGENT sold as opposed to what their entire company sold. Even if the brokerage sold 100% of the homes do you really want to work with an agent who hasn't sold ONE home in your hood?

But no one has ever accused the average consumer of being savvy. :)

Gayle Barton said...

Timely article, Lydia –
Sad, but true, in our market too...

Those who can - do! Those who can't - lie!

We are in a popular 2nd home /vacation rental market where most homeowners live in other areas, sometimes other states, and simply do not have a personal relationship with a local Realtor. Because of this, they are usually dependent on marketing materials they receive by mail or via the internet.

In addition to blatantly false advertising, we have actually had agents going behind the sign.

It is a small market so most agents aren’t willing to “call out” an agent for misrepresentation, but a few of the brokers have stepped recently to try curb it.

Liquid Rubber said...

There are many estate agents working in the valley. I haven't received this letter yet.
Liquid Rubber