Price Games Hall of Shame

Back in the dark ages of real estate, home shoppers had to rely on real estate agents to give them pretty much any information about homes that were on the market. A listing agent could change the price of a home by some insignificant amount, pop it to the “hot sheets” the buyers’ agents relied on, and get a bunch of attention for their listing.

Thankfully, buyers today have the information advantage, and such games rarely work anymore. Of course, that doesn’t stop some agents from trying. Today we will highlight some of the most ridiculous price games listing agents around Seattle are playing in a desperate attempt to get attention to their (apparently overpriced) listings.

Here’s your Price Games Hall of Shame:

Photo Address Old Price New Price $ Diff % Diff Orig. Price
15720 Manor Way $215,990 $195,990 $20,000 9.3% $159,990
3917 221st St SE $415,950 $409,950 $6,000 1.4% $409,950
7800 SE 27 St #205 $750,000 $749,500 $500 0.07% $750,000
5803 231st Ave NE $668,000 $640,000 $28,000 4.2% $640,000
18525 NE 20th Pl $533,300 $529,900 $3,400 0.6% $533,300
2828 95th Ave NE $2,999,995 $2,995,000 $4,995 0.2% $3,575,000
4516 Meridian Ave N $699,000 $698,800 $200 0.03% $699,000
2847 Franklin Ave E $699,000 $698,800 $200 0.03% $699,000
4308 NE Sunset Blvd Unit N1 $79,500 $78,900 $600 0.8% $79,500
23330 117 Ave SE $292,000 $289,900 $2,100 0.7% $292,000
611 SW 5th St Unit A202 $79,700 $78,900 $800 1.0% $79,700
1203 E Hamlin St $1,299,000 $1,295,000 $4,000 0.3% $1,299,000

Astute readers will notice that the Czech Sky even makes an appearance above. Nice.

Seen any over-the-top price games worth shaming? Link it up in the comments!

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

35 comments:

  1. 1

    The NWMLS has rules against nominal price changes, and I think that might even be one of the ones subject to the automatic fines, and that’s the reason this behavior is much less prevalent than before, not the consumer websites, IMHO.

    Rate this comment: Thumb up 0

  2. 2
    Realty Check says:

    Agents don’t control price changes, sellers do.

    Rate this comment: Thumb up 0

  3. 3
    Keith T. says:

    Those Renton 3BR condos are actually decent deals. Hell, a 30yr on them are just the other side of my car payments. Considering that they probably sold upwards of $150K at one point, they’re the only reasonably priced RE on the list.

    Assuming they aren’t lined with mildew, mold, and rats, holes in walls, torn carpet, or anything like that in the rooms that aren’t photographed. :)

    Rate this comment: Thumb up 0

  4. 4

    I just checked, and an “insignificant price change” is a $250 automatic fine. I’m pretty sure there’s a Legal Bulletin defining that a bit more, but I didn’t get that far.

    Rate this comment: Thumb up 0

  5. 5
    random guy says:

    Escala condominiums deserves a permanent membership in that hall of shame.
    http://seattlebubble.com/blog/2010/02/03/escala-condos-shocking-price-strategy-timeline/

    Rate this comment: Thumb up 0

  6. 6
    ChrisM says:

    I’ve tried complaining to the MLS about this, and got nowhere. MLS representative e-mailed me the following:

    “Thanks for your email as long as the have the paperwork sign by the seller we cannot stop them”

    after I complained about a $100 reduction on a 275k listing. Seems like that conflicts w /Kary’s response.

    Rate this comment: Thumb up 0

  7. 7

    RE: ChrisM @ 6 – How long ago was that?

    Rate this comment: Thumb up 0

  8. 8
    ChrisM says:

    RE: Kary L. Krismer @ 7 – 6/11/2010.

    Rate this comment: Thumb up 0

  9. 9

    That may have been before the automatic fines went into effect, but I thought there was a rule prior to that. If you want to try again sometime, you can cite them to Rule 1(c).

    Rate this comment: Thumb up 0

  10. 10
    Daniel says:

    By Kary L. Krismer @ 1:

    The NWMLS has rules against nominal price changes, and I think that might even be one of the ones subject to the automatic fines, and that’s the reason this behavior is much less prevalent than before, not the consumer websites, IMHO.

    Oh and why did the NWMLS change their rules? Was it maybe due to consumer pressure?
    Arguing that it is just the rules is pure semantics here.

    Rate this comment: Thumb up 0

  11. 11
    ChrisM says:

    RE: Kary L. Krismer @ 9 – Thanks, Kary. Any idea how “insignificant price change” is defined? Some of the examples above (such as the 9% discount) I would consider significant.

    Rate this comment: Thumb up 0

  12. 12

    By Daniel @ 10:

    By Kary L. Krismer @ 1:
    The NWMLS has rules against nominal price changes, and I think that might even be one of the ones subject to the automatic fines, and that’s the reason this behavior is much less prevalent than before, not the consumer websites, IMHO.

    Oh and why did the NWMLS change their rules? Was it maybe due to consumer pressure?
    Arguing that it is just the rules is pure semantics here.

    Because it annoys agents too! We have our own hotsheet type systems, and it’s very annoying for us for the same reason. I suspect complaints from agents probably is what caused the rule change/addition.

    Rate this comment: Thumb up 0

  13. 13

    By ChrisM @ 11:

    RE: Kary L. Krismer @ 9 – Thanks, Kary. Any idea how â��insignificant price changeâ�� is defined? Some of the examples above (such as the 9% discount) I would consider significant.

    I haven’t gone back to read the legal bulletin, but I suspect it’s a combination of percentage of price and nominal amount, and probably not well defined.

    Rate this comment: Thumb up 0

  14. 14
    mikey says:

    If you look at real estate as an investment then this FRAUD is especially troubling. Imagine if a stock was able to change its historic value to create growth curves or price stability that does not exist. If I buy GM stock thinking that is has a 1% annual return over the last year when it actually has a 15% loss then people would go to jail. The real estate industry should demand tighter regulation not less. The people that do this kind of fraud are profiting from the reputations of those who are honest. If you are an honest real estate agent then they are taking money directly from your pocket.

    Rate this comment: Thumb up 0

  15. 15

    Now I’ll Think Like a Con Man

    Suppose I first listed a property for 50% over what I knew it would possibly sell for, then after it sat unsold, I reduced the price 30% and whispered to the agent representing me to hook a dumb buyer by offerring it to them for another 20% off.

    I swear I saw that at Mor Furniture [the salespeople even admitted it to me]….they have a sales tax and free delivery sale, but before the “alleged” sale the prices were 15% lower throughout the store too [making the carry out price identical before or after the sale]….I assume its quasi-legal, but certainly unethical IMO.

    Rate this comment: Thumb up 0

  16. 16

    RE: mikey @ 14 – List price is not value, so a change does not show an increase in value.

    Also I’d note that without more research you couldn’t determine if perhaps a price increase was justified. For example, maybe a house received a new roof or some other improvement/upgrade.

    Rate this comment: Thumb up 0

  17. 17

    By softwarengineer @ 15:

    Now I’ll Think Like a Con Man

    Suppose I first listed a property for 50% over what I knew it would possibly sell for, then after it sat unsold, I reduced the price 30% and whispered to the agent representing me to hook a dumb buyer by offerring it to them for another 20% off..

    As I’ve mentioned in the distant past I’ve seen some flippers do that sort of thing. Tell a buyer that they’ll sell it for a certain price if it’s in contract prior to them completing the work, but that the price will be higher afterward. Both prices are over market. Some people fall for that.

    Rate this comment: Thumb up 0

  18. 18
  19. 19
    Hugh Dominic says:

    Jesus, how hard would it be to change the hot sheet query so it excludes any price changes < 2% ? A 16 year old with a SQL textbook could do it in under a minute. Instead, the MLS solution is to forbid small price changes and levy fines? Stupid.

    Let sellers adjust prices if they want. Write the query so it highlights the deals that you want to see and excludes the ones you don’t.

    Rate this comment: Thumb up 0

  20. 20
    Cheap South says:

    By Keith T. @ 3:

    Those Renton 3BR condos are actually decent deals. Hell, a 30yr on them are just the other side of my car payments. Considering that they probably sold upwards of $150K at one point, they’re the only reasonably priced RE on the list.

    Assuming they aren’t lined with mildew, mold, and rats, holes in walls, torn carpet, or anything like that in the rooms that aren’t photographed. :)

    Assuming they are in a safe area, the $350 HOA dues might be scaring buyers away. Own the condo for 10 years and you just added $42K to your expenses (provided they don’t raise those HOA dues) .

    Rate this comment: Thumb up 0

  21. 21

    By Hugh Dominic @ 19:

    Jesus, how hard would it be to change the hot sheet query so it excludes any price changes < 2% ? .

    You’d have to make it user definable because the percentage would need to change based on preferences and the value of the property.

    As to the consumer sites, keep in mind that many of them can’t even search for partial bathrooms correctly, or search for a range of beds/baths as opposed to minimums. Do you really think they’re going to somehow add in a feature that keeps track of the old price and compares it to the new price?

    Rate this comment: Thumb up 0

  22. 22
    Racket says:

    “If you look at real estate as an investment then this FRAUD is especially troubling. Imagine if a stock was able to change its historic value to create growth curves or price stability that does not exist. ”

    Not really, this would be like trying to sell a stock for more than it’s listed on the exchange for, then lowering the price to meet the exchange price. I don’t actually think this is illegal.

    Now the methods in which you need to use to sell it to someone above the exchange is a different story.

    Rate this comment: Thumb up 0

  23. 23
    ray pepper says:

    “desperate attempt to get attention to their (apparently overpriced) listings.”

    Does it really matter Tim? Do you believe the additional attention they seek will result in a sale of any of those. Buyers are so much more aware now of value and if they slip up I can virtually guarantee you the bank funding the loan will NOT. You will get another appraisal under value. I see this again and again and again.

    Unless of course you are talking a CASH Buyer. But, what I have seen from cash buyers is that they would be the LAST to pay more then a home is worth.

    Rate this comment: Thumb up 0

  24. 24

    RE: Racket @ 22

    LOL Racket

    Stocks are way overpriced IMO. Think about it, big pension fund money managers move money brainlessly into the market even when the stocks are worthless. Look at bank funds in 2009.

    These same “insiders” sold their stock before they got everyone elses in to buy too [didn’t Martha Stewart serve time for this?]…LOL

    Rate this comment: Thumb up 0

  25. 25

    By softwarengineer @ 24:

    These same “insiders” sold their stock before they got everyone elses in to buy too [didn’t Martha Stewart serve time for this?]…LOL

    I remember Stewart got a tip and sold some stock in a company other than hers, but I don’t remember if that’s what got her in trouble, or if it was how she responded to the inquiries about the transaction.

    Unless they have specific critical information that is not yet public, I’m not really sure insiders have a better feel for how their company is going to perform than outside investors familiar with the company, and when that type of event occurs it’s likely only a small percentage of the insiders that have that critical information.

    Rate this comment: Thumb up 0

  26. 26
    deejayoh says:

    By softwarengineer @ 24:

    Stocks are way overpriced IMO. Think about it, big pension fund money managers move money brainlessly into the market even when the stocks are worthless. Look at bank funds in 2009.

    what are “bank funds”? do you mean ETFs focused on the banking sector? Cuz if you’d have been smart enough to put money into those – or even individual bank stocks – you’d be up, oh, 50 to 200% today. That doesn’t sound brainless to me.

    By Racket @ 22:


    Not really, this would be like trying to sell a stock for more than it’s listed on the exchange for, then lowering the price to meet the exchange price. I don’t actually think this is illegal.
    blockquote>

    I think it’s known as the difference between the bid and the ask.

    Rate this comment: Thumb up 0

  27. 27

    RE: deejayoh @ 26

    Yes, Today, They Bounced Back a Bit From 2009

    But how many sold in 2009 after their wallopping? Plenty, WSJ article for proof.

    http://online.wsj.com/article/SB124260653296128765.html

    IMO, the poorer folks and those on fixed income sold out faster, the WSJ article above implies this too. BTW, do you think 2011 will be a good year or a risky year for stocks? IMO, through June 2011 it may be OK, after QEC2 is exhausted after June 2011, all bets are off.

    Rate this comment: Thumb up 0

  28. 28
    Blake says:

    RE: softwarengineer @ 27
    Stock prices are detached from reality in many ways… Remember that the world is awash in US $ AND overcapacity/supply, thus there is not much to do with these dollars other than bidding up commodity and stock prices. It’s the fallacy of the supply side stimulus (i.e. tax cuts) and the Fed’s continued flooding of $. There’s just not much demand… who wants to expand plants and buy equipment or finance more commercial or residential building in this economy?? They’re just blowing bubbles, again and again.

    I was just looking at commodity prices this morning. Here are price changes over last 12 months:
    Wheat +61%
    Cotton +112%
    Corn +75%
    Coffee +66%
    Silver +52%
    Copper +28%
    Gold “only” +21%
    The Dow Industrials are up 12% the last 6 months… What makes you think that is significant and based on “fundamentals?” Stock market cap is still inordinantly high:
    http://www.ritholtz.com/blog/wp-content/uploads/2011/01/1-14-11-Market-Cap.gif
    Speculation is rampant… prices are soft. Diversify and wait…

    Rate this comment: Thumb up 0

  29. 29
    Blake says:

    Also: Here’s for the stock buy-n-hold crowd… you can get get nauseous riding that roller coaster!
    http://www.ritholtz.com/blog/wp-content/uploads/2011/01/SPX-ups-and-downs.png

    ps- Yes, Martha Stewart sold stocks based on an inside tip from her friend Sam Waksal. She sold her stocks in Waksal’s company (the drug they were developing was rejected by the FDA) and saved herself something like $60,000…. crazy, because at the time she was probably making $60,000 every few hours on all her products and good “name.” Rich people can be so pathological about money…

    Rate this comment: Thumb up 0

  30. 30
    Chuck C says:

    Here’s another one for the price games hall of shame. Here on SB I’ve read about it happening, but this is the first time I’ve actually seen it happen to a property I’ve been tracking via Redfin.

    If it doesn’t sell for 630 days at the asking price, it MUST mean the asking price is too low, so raise it by 10%, LOL!!!!!

    http://www.redfin.com/WA/Gig-Harbor/7726-Ray-Nash-Dr-NW-98335/home/2966704?utm_source=myredfin&utm_medium=email&utm_campaign=listings_update&utm_nooverride=1

    I drive by the house regularly during the course of daily driving, and haven’t seen evidence of major improvements being made.

    Rate this comment: Thumb up 0

  31. 31
    mikey says:

    ” do you mean ETFs focused on the banking sector”

    So how are the banks making so much money? I don’t see another bubble. Could it be the 12 trillion (55% of US GDP) in zero interest rate loans that they used to buy US Treasuries? Several of the banks almost shot themselves in the head. The trader who was the counter party to the biggest loss in Wall Street history (John Paulson trade) made millions. It looks like several traders were buying and selling derivatives between themselves and then splitting the commission. Banks are rigged for catastrophic failure because the incentive structure of the executives and traders is totally out of line with the interests of the company and shareholders. A pipeline of money from the Federal reserve will only keep that shell game working for so long. Eventually the banks are going to have to do some actual investing. Let’s see how that works out.

    Rate this comment: Thumb up 0

  32. 32

    By mikey @ 31:

    So how are the banks making so much money?.

    I don’t track banks, but I did note Wells Fargo apparently had record earnings. They’d also bought Wacwheveritis Bank, which wasn’t a small bank. I was wondering if the earnings were really record earnings if you added the prior earnings of the two together?

    Also, as I’ve said in the past, I suspect they have really benefited from the refinance activity because they’ve been able to reduce their reserves for bad loans as loans are refinanced. I wouldn’t want to buy much of what they still have that’s pre-2008!

    Rate this comment: Thumb up 0

  33. 33
    EconE says:

    By mikey @ 31:

    ” do you mean ETFs focused on the banking sector”

    So how are the banks making so much money? I don’t see another bubble. Could it be the 12 trillion (55% of US GDP) in zero interest rate loans that they used to buy US Treasuries? Several of the banks almost shot themselves in the head. The trader who was the counter party to the biggest loss in Wall Street history (John Paulson trade) made millions. It looks like several traders were buying and selling derivatives between themselves and then splitting the commission. Banks are rigged for catastrophic failure because the incentive structure of the executives and traders is totally out of line with the interests of the company and shareholders. A pipeline of money from the Federal reserve will only keep that shell game working for so long. Eventually the banks are going to have to do some actual investing. Let’s see how that works out.

    Not only are they playing interest rate arbitrage, but from what I understand, they’re still booking fully amortized payments on all the OptionARMs out there without actually receiving the income.

    Smoke and mirrors at its finest!

    Rate this comment: Thumb up 0

  34. 34
    Dirty Renter says:

    RE: mikey @ 31

    Paulson made billions, not millions.
    Please note he went long on the banking sector 2Q of 2009, according to the 13F’s.

    Rate this comment: Thumb up 0

  35. 35
    mikey says:

    “Dirty Renter”

    A counterparty is the other side of a derivatives deal or contract. The reason it is important to look at the trader on the other side makes from a horrendously bad decision is that it illustrates that individual traders only has the choice of becoming wealthy and becoming extremely wealthy. In other word the trader or bank executive makes money either way. It is the tax payer, and the banking investor that loses. What a great deal.

    I understand that the banks are making money. But I think it is much more important to ask how they are making their money. Banks made money during the boom years but no one stopped to question what they were doing. We are talking about loans that equal to 55% of the entire GDP of the United States. That should terrify anyone looking for long term stability.

    Rate this comment: Thumb up 0

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please read the rules before posting a comment.