Common Ways Sellers Fudge Their Listings

by Dian Hymer, Inman News

LiarSome people just don’t get it. If you advertise a house as having a San Francisco Bay view, buyers will expect to walk into a public room like the living room and see the bay. They won’t be satisfied with a peek of the bay from the master bathroom.

Exaggerating in advertising not only leads to disappointment, it can have legal consequences. For example, sellers have been sued over misrepresenting square footage.

Usually, sellers think their house or land is bigger than it is. They hope that by advertising the property as bigger, they will sell for a higher price. But, if the sellers are later sued when the buyers discover that the property is quite a bit smaller, the sellers could end up paying out far more than the profit they received from the sale.

Most buyers would be pleased to know that their home had been built by a renowned architect. It’s fine to advertise that fact, if you have evidence to confirm that the information is accurate. Sometimes sellers or their agents think a house looks like it was designed by a certain architect so they advertise this as fact.

A number of years ago, a couple bought a home that was advertised as designed by Julia Morgan, whose most famous work was “La Casa Grande,” William Randolph Hearst’s home at San Simeon, Calif.

The buyers discovered just before closing that the house had not been designed by Julia Morgan. They had already sold their home and had nowhere to go, so they went through with the transaction. Even though the buyers found out about the deceptive advertising before the sale closed, they were able to successfully sue the sellers and their agent for false advertising.

Misleading advertising can occur regarding the numbers of bedrooms and bathrooms. Some sellers would rather advertise more than they should. But, if the fourth bedroom is a tiny sunroom with an add-on closet, buyers who need four full-sized bedrooms are going to be turned off when they realize that the house has only three rooms that can be used as full-time bedrooms.

HOUSE HUNTING TIP: From a purely marketing standpoint, it’s usually better to undersell than oversell. Buyers who have expectations about your house based on the advertising will not buy your house once they realize it doesn’t have what they want or need. Buyers who want a view want to be able to sit in a room and enjoy it. They won’t be satisfied with a view you can see only if you hang over the side of a deck.

Buyers will be in a much more favorable mood to buy your home if they find that it actually has more than they were expecting. With this in mind, it would be better to advertise the four-bedroom home mentioned above as a three-plus-bedroom home. This way the buyers are expecting only three proper bedrooms. They may be delighted to find that there is an extra room that can be used as a home office, nursery, den or occasional guest room.

Disclosure laws vary from state to state. But, it makes good sense to be straightforward in your real estate dealings, especially when it comes to how you advertise your home to the public.

THE CLOSING: Buyers should make sure they do careful due diligence investigations to confirm information that’s disclosed to them in an ad, or elsewhere, that would make a substantial difference to them, like whether an additional bedroom was added with permit, or whether the architect is who the seller says it is.

Dian Hymer is a nationally syndicated real estate columnist and author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books. What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Copyright 2008 Dian Hymer

Click here if you missed Dian Hymer’s feature Curb Appeal Tips That Pay Off.

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