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Want To Lower The Asking Price For That Home? Complain About It Online
from the negotiation-tactic dept
Last year, the Freakonomics guys helped reveal the type of "code words" that real-estate agents used in describing your home. Basically, there were certain general words they'd use ("charming," "cozy") when there was nothing concrete they could say that was positive. They were basically the real-estate agent's way of hinting that the home wasn't anything special, since they certainly couldn't be honest. However, people who are simply looking at buying homes have no such restrictions. New sites are popping up that allow people who are shopping for homes to post their own reviews of the homes online for others to read. It's kind of like Amazon's reviews, but there's one big difference. Unlike buying a product from Amazon, a home is normally one of a kind -- and the feedback from someone who actually purchased a home is of little use to anyone else, since that home is now off the market. There's little advantage leaving positive feedback for others if you plan on buying the home. That might simply drive up the competition. And, once you've bought the house, the feedback is useless. However, if you want to scare off others, there's plenty of incentive to leave bad feedback. The article also notes that people may be leaving bad reviews of houses in their neighborhood to make their own house look more attractive. In other words, this feedback system doesn't really work. It just encourages negative feedback and has little incentive for positive feedback. While the companies that offer such reviews defend them, it's difficult to see them being nearly as useful as other types of online reviews.
Reader Comments
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Different in the UK
"The article also notes that people may be leaving bad reviews of houses in their neighborhood to make their own house look more attractive."
Perhaps the "glut" mentioned in TFA makes the situation in the US different, but at least in the UK this theory makes no sense at all.
Typically the value of a house over here is worked out by looking at what similar properties in the area have sold for and adjusting for house price inflation. Further, conventional wisdom is that you should pick the worst house in the best area you can afford over the best house in a worse area.
So a UK homeowner would have an incentive to praise his neighbours houses and his area, in order to drive up the value of his property, not the reverse.
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Still Dysfunctional
But that still doesn't give you any incentive to leave GENUINE feedback - only to leave false, misleading, or completely bogus feedback in the other direction. The article is right, there's no real value (to potential homeowners or perspective buyers) to look at this site.
Now if someone went around and genuinely reviewed the houses for sale, and posted their opinions, that'd be something to see. And might actually be useful, if people trusted them.
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Huh?
That doesn't really makes sense. You want your neighbors crappy house to sell for as much as possible, that drives up all shrouding home values and then if your plus's on top of that can put into a whole new market segment. Property values rise and fall collectivly, you never want to make see them dip in your area.
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Re: Huh?
Griffon, If you plan to stay in your house for the long term then you want the value to stay low so that your property taxes don't increase.
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Re: Re: Huh?
A property's taxes are only likely to increase if the house is used for collateral in a loan (requiring an appraisal) or if the house is sold, and the appraisal leads to a higher value for the home.
Outside of appraisals, homes are only evaluated by their counties once every 10 years or so. There is little affect from any website in affecting any county appraisal of a property.
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Re: Re: Re: Huh?
Here in glorious NJ, reappraisals can happen more often than that, and anyway our property taxes go up each year regardless of whether we've been reappraised or not. I'm thinking seriously of relocating for just that reason--they're pricing us out of the state.
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Re: Huh?
I think what TFA is trying to say is that people who are selling a house will leave negative feedback for other houses that are on the market in their neighborhood so that people will buy their house.
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This is daft
If you are thinking of buying a house, then you go an have a lookat it check it out yourself, do people really decide not to even bother taking 1/2 hour out of their lives to look round a house they might be interested in just becuase someone has posted bad things about it on a website. On amazon if you buy something andit is a poor product but not fualty it is too late once it has arived and you get your hands on it, with a house you get to throughly check it out and do lots of research on it before you commit to buy it. Here in the UK at least you simply can't get a mortgage without various land registry checks and surveys.
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If I wanted to buy a house....
If I was in the market for a house and saw one I liked but the price was too high, I might be willing to leave negative feedback on it to 1) affect other people's interest in it and 2) hope to drive the price down.
Anyway you look at it, it's a shit idea.
Rob Miles
--
There are only 10 types of people in the world;
those who understand binary and those who don't.
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Which is why...
you should just go look at the house yourself and not depend on the opinions or reviews of others.
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Beck, you're wrong I'm afraid
Um, Beck...you're more worried about having your property taxes increase versus the value of your home?
Sorry but that's a horrible investment strategy. First of all property taxes need to be eliminated anyways, but since that won't happen anytime soon (since people love big government) the value of your house going up is much more substantial than the property taxes in the long term.
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Anonimity Is The Problem
Being anonymous is the problem with sites as described. For every good, positive review, there's always a miscreant that slams things he / she doesn't understand, and makes things sound worse. It's true at Amazon, and it's true on this board. Look at some of the posts - incoherent sentences, bad spelling and a bunch of "u kno" type language. Sorry, that stuff doesn't cut it in the civilized world.
A buyer's view of any house is as subjective as anything in this life. While some buyer may like the bright yellow kitchen cabinets, others would be aghast at such things.
A very good review site for homeowners seeking tradesman to perform house repairs is Angie's List. A user must pay a monthly or annual fee to join, and that pretty much eliminates the nut jobs. For the real estate market, unless the writer is willing to identify himself, I see little value in such reviews.
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Re: Anonymity Is The Problem
yes, I corrected the headline.
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online reviews/comments for real estate
I've recently relocated from Germany (U.S. forces civilian) to the Alexandria, Virginia/DC area and have been in the house-hunting business for about 8 weeks.
In this as-yet fruitless search, I'd WELCOME comments from others and here's why:
1. I think I'm smart enough to suss out the BS from a legitimate issue or problem with the house.
2. Going to view a house is not a 30-minute proposition in this area, with the traffic, so anything that brings a dose of reality to the stilted verbiage of the realtor-snakes would be helpful in saving me a trip.
3. As a newbie at this, it takes a little while to learn what they AREN'T saying and what means. "Luxury" = average, "spacious" = normal size, and if something in particular isn't mentioned at all, it's either not there or is in such terrible condition there's no sense in even considering it at all. I read one ad today that even mentioned the nearby public library as being very nice. What does that have to do with a house?
Yeah, I'd welcome a few comments, it might save me hours of searching.
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Re: online reviews/comments for real estate
The issue is not with what is on the outside of the house -- as anyone can comment on that. The issue is what is harder to find. For example, how old the Water Heater is. Is this the original Air Conditioning unit on a house build in 1972? Has there ever been termites found in the area? What about Radon levels? Does the siding on the house need to be replaced? What about the roof?
This is the information that usually makes or breaks a sale. If someone buys a house, the last thing they want to do is have to shell out several thousand dollars worth of improvements (unless they want to "flip" it).
Of course, these fixes are usually negotiated before the final sale, but it would be nice to know about these things ahead of time.
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Sounds Great! For apartment complexes.
I see no value in this for houses at all.
However, it's a great idea for apartment complexes. Its always nice to hear from tenants about the place. Especially the tenants that left after their first year lease was up.
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so you want to know the code words
On a lighter side:
http://www.craigslist.org/about/best/bos/177040375.html
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