While any real estate agent or investor who informed a buyer that a home had granite countertops, fresh and fluffy carpet and beautifully hand-tiled floors and then attempted to sell them that home without any of those interior amenities would be justly considered an out-and-out liar, the magic of “photoshop” and something called “virtual staging” is creating an ethical uproar in many aspects of the real estate community. Using digital technology, investors, agents and anyone else who has the right software can post images of a property that they wish to sell, and then use those images to market that property. In “real life,” a seller is highly likely to stage a property by cleaning up, putting in new, beautiful furniture or even throwing a pie in the oven. However, staging takes on a whole new meaning when you use computer technology to show a buyer what could be rather than what is.
This issue is becoming particularly serious for realtors who are showing buyers homes that in many cases the buyers, not the agents, have identified online. When the buyer and agent arrive at the home, it turns out that the seller and in some cases that seller’s agent have liberally redecorated – digitally, of course – or even replaced sagging ceilings, crown moldings or other structural components of the home[1]. Not only does this lead to disappointment, but buyers are actually blaming their own agents for the fiasco.
The National Association of Realtors has no official stance on virtual staging, although article 12 of the Realtors’ Code of Ethics does require that agents and brokers – not necessarily sellers – “present a true picture in their advertising, marketing and other representations.” Is digital staging something that just has to be factored in now as part of due diligence, or do you think it should be regulated?
Thank you for reading the Bryan Ellis Real Estate Letter! Your comments and questions are welcomed below.
[1] http://toledoblade.com/article/20100815/BUSINESS05/8140339
Just part of due diligence. While not the ‘high moral ground’, regulation is simply another layering of cost that would, of necessity, have more loop holes than actual requirements. Buyers and sellers need to use a very healthy dose of ‘common sense’ when purchasing…it is not practical or helpful to try and regulate everything.
Couldn’t have said it better myself, Joyous Jim. Part of the problem in this country is that the government thinks it can eliminate “due diligence” and “caveat emptor” from all transactions containing a “consumer”. We live in a nanny state and its getting worse every day.
Only regulation required: Seller and/or agent be held financially responsible for “any misrepresentation” also known as “Full
Disclosure.” Crooked people in any form should PAY.
Disclose, Disclose, Disclose………But in the new Retail Real Estate industry it is an “anything goes” mentality. And when all else fails, blame the other guy. This industry is in need of a complete overhaul, immediately!
This deception is something I have run into over and over for years, digital is newer but the lying is just par for the course. Not all practice this but plenty do! Makes the few good ones look bad and sours most people on realtors over time.
A new regulation won’t help, the regulations they have are not followed very well if at all. I can post you dozens to hundreds of misleading ads in any market in the country right now. If anything is asked about why they are misleading, some so blatantly it hurts to read them, the only answer I get is “that is how is done” or ” I will look into that” and nothing ever happens. When you quote them the violation, the person in charge gets huffy and insulted anyone would ever question what they are doing.
So more regulation, less regulation, none of it matters, the same deceit will be practiced to get a sale made. Some time not sure which group is worse, realtors or politicians.
One thing is certain the deceitful ones certainly give the honest ones a bad name as a group!
Hmmm… So, I guess photoshopping in the white water view, the extra 5,000 sqft of living space, the Olympic-size Koi pond, and bowling alley is unethical….?
Well said, there seem to be a number of gurus/teachers who suggest working the entire nation from your computer. It is the responsibility of the investor to do their due diligence and if they buy a bad property “through the internet” then maybe they did not do their due diligence. We as real estate professionals (realtors and investors) have a responsibility to keep our business dealings on a professional level.
Thanks for reminder.
Add an ocean view for me….if only in my mind.
The deception is self-defeating. Most buyers are not going to actually get serious and into contract based on some online images. And when they do a walk-thru, the lie will be plainly evident. Now that seller/listing agent has just opened a can of worms for the buyers to be (rightfully) suspicious about what ELSE is wrong with the property… or the buyers simply walk away never to return feeling (time) disrespected and deceived.
I honestly don’t know what listing agents think they are going to achieve or think they can be sneaky. Hell, if an agent does not properly disclose relevant facts or obvious issues, they’re going to get sued, risk their license, etc. In CA we have an AVID form (Agent Visual Insp Disclosure) for just this type of due diligence on the part of BOTH agents.
On the other hand, if an empty property is just virtually staged with digital furniture (and not too much or to cover up defects), that may have some use; really staging a property costs and is a bit of a pain. However, once again, the magic is lost once the buyers actually step foot in the place.
Real quality rehabbing/updating and real staging definitely helps sell property. 1st time buyers overwhelming need a shiny, turn-key property they can just move into (despite their fixer upper fantasies)… and they are willing to pay current retail on good stock like this.