real estate

Luring homebuyers with sneaky prices

Steve McLindenq_v2.gifDear Steve,
My fiancée and I have been shopping for new homes in South Florida and notice a trend where builders offer "special" sales prices on inventory homes, only to tell us when we arrive with checkbook in hand that "the price was a mistake on the Web site" or "we just called corporate and its turns out we can't sell it for that price."

On one occasion, a specific model and street address were noted for one of these discount "deals." When we got there, they hid behind their disclaimer. Is there any way to force them to make good on their offers? In this market, where builders face stagnant inventory, I was very surprised that this tactic continues.
-- Chris

a_v2.gifDear Chris,
Actually, those bloated inventories are exactly why more builders are running these bait-and-switch schemes. Despair begets deceit.

Of course, bait-and-switch is not limited to home sales. We see it in disciplines ranging from car dealerships to carpet-cleaning to the mortgage industry to national politics, to name just a few. But with homes, those fake promises often add up to tens of thousands of dollars and are apparently quite effective at luring unwitting buyers: "Savings up to $75,000! This weekend only! Wow!"

When you went to that one specific South Florida subdivision, I see you were quoted that trusty old Web site disclaimer, which probably said something like "prices may change without notice."

But then you were probably graciously offered "an even nicer unit at a better location" that was nowhere near that bait price. If you balked, you were probably told, "Well, let's work on the numbers and see what we can do." But those numbers never approached the price of that "loss leader" home that was never really for sale, did they?

Other examples of real estate bait-and-switch are all too common, such as new condos that are posted on the Multiple Listing Service for an eye-opening, cheap price by an agent, only for buyers who arrive at the sales office precisely when it opens to find they have already somehow been "sold" -- even though they were never listed as "pending" or "STI," short for "subject to inspection," and may remain on the listing service for several more weeks.

Then there are those salespeople who conveniently "forget" to tell potential buyers as they sign on the dotted lines that the components and systems they viewed in the model home won't be coming with their purchase package of an "identical home."

I am not alone in noting that the largely self-regulated real estate industry is in dire need of ethics reform, thanks to a small percentage of bad eggs that really stink things up for the many good ones. Of course, lots of these "site reps" at sales venues are not even Realtors and technically aren't accountable for codes of conduct at all.

To answer your question, there's a slim chance you could force the builder to sell at advertised prices, but it might take a court battle that could ultimately prove expensive and futile. However, feel free to contact Florida Attorney General Bill McCollum's office by e-mail at ag.mccollum@myfloridalegal.com, or call its citizens services office at (850) 414-3990 or Florida toll-free number of (866) 966-7226 to file a complaint.

For other readers, go to naag.org for a full state-by-state contact list of attorneys general.

Remember, "too good to be true" is usually ... well, you know.

To ask a question of the Real Estate Adviser, go to the "Ask the Experts" page, and select "buying, selling a home" as the topic.

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