Exploring the Taboo against Prices on “For Sale” Signs
Once Upon a Time
Buyers agents as we know them in modern Illinois did not always exist. There was a time (and in some states it still exists) when agents were expected to represent both sides in home sales. “For Sale” signs with phone numbers were meant to give you access to the sellers’ agent, who would show you the property and serve as an intermediary in negotiating the purchase contract. In the days before the internet, this was one of the few ways you could find out price information, other than stopping by a real estate office or reading the Sunday paper.
If the price did not agree with you, the agent in question could take you out and show you other properties represented by their office. Before the advent of MLS systems, this was all they would show you. Back in those days when agents controlled access to all the listing information, the signs were a very important route for generating business. So, those real estate signs would never list prices. They would only list the name of the agency and a telephone number. Buyers would call in, have a chat, and get upsold. Brilliant.
Of course, nowadays we have the internet. If you see a sign in front of a property you can look it up on a smartphone, or maybe scan a QR code, and you’ll get all the info you need. However, the internet also brings its problems. Scammers can co-opt listing addresses with fake ads, so that the information you get could be legit or fraudulent. Since many scammers make their money by posting copycat listings at too-good-to-be-true prices, one would think that the best safeguard would be to simply print the price of the listing right on the “for sale” sign, or perhaps in a little brochure in a box attached to the sign. Unfortunately, taboos exist against both of these options.
Once Upon Another Time
I want you to cast your mind back to the America of the 1960’s and 1970’s. Before the real estate downturn of the late 2000’s, the biggest scandals to come from the residential market were usually based around housing discrimination. It was the era of the race-based civil rights movement – Martin Luther King, Jr., Malcolm X… and “white flight.” Families of color were gaining respect, mobility and financial power, but were up against a resistant culture similar to the one that challenges the gay and lesbian community today.
“For sale” signs in large numbers on a block were viewed as warnings that the neighborhood was about to experience a shift in racial demographics. Many white families of the time interpreted this as a signal to get out while they still could, as the predominant attitude of the time was that families of color would drag down property values by default.
We know better now, thank goodness.
Unfortunately, in the process of learning what we know now, real estate signage got caught up in the shuffle. You see, block-busting and panic peddling are illegal. That’s when salesmen prey on people’s fears of losing value to generate more sales. In its most fully distilled form, block busting involves a salesman going to a neighbor and saying, “Just so you know, the house down the street just sold for half of the value of your home. You may want to get out before property values fall any further. I can help if you list your home with me.” Or, as happened in the 1960’s, “The house down the street just sold to a family from [insert foreign country here]. I can help you get out before [stereotypical bad thing] happens to you.”
With the rise of the Fair Housing act, many states and towns decided that real estate signs had the same effect as block busting, albeit silently. Signs were banned and remain banned to this day in many areas of the country.
In the Modern Era
Signs have crept back into the modern landscape of real estate, both literally and figuratively. Most single family homes for sale in Chicago will have a “For Sale” sign out front, although some will opt out to deter squatters and protesters from the Occupy movement. Condo buildings often forbid them, especially skyscraper communities. This makes sense – the number of units for sale in a building that size could overwhelm any yard and fence space available, and make it seem like the community is a failure even if it is really thriving.
However, with the exception of large developments still in process of construction, prices are generally not seen on the signs. You’d think they’d have become more universal by now, since it just takes a quick Google search to find the price that matches the sign. So why are we still priceless after all these years?
Well, first of all, imagine what it would feel like walking down a block with “For Sale” signs if they all had prices. Those prices would make it quite plain what the general income of the whole neighborhood is. High prices could make the whole block targets for theft. Low prices make it seem like the ghetto. Either way, it wouldn’t feel like a pleasant place to live, In fact, it would feel like a used car lot.
Secondly, prices change a LOT. In some cases they’ll can even change multiple times in one day. In the case of rentals, which are sometimes listed non-exclusively with multiple agents, each agent could have a different price for the same apartment.
If you were a neighbor living close to a home for sale, and you saw the price keep dropping and dropping, how would that make you feel? Scared? Depressed? Determined to use a different Realtor than your neighbor when it comes time to sell YOUR house? Probably all of the above. How about if you walked up to a $1500 apartment with your agent only to see a sign on the door advertising it for $1400 under a different agency?
Besides, sign printing costs are not cheap, and reprinting signs every two weeks as prices change could get really expensive.
Thirdly, agents want to talk to you. Here in Illinois we have separate agents for buyers and sellers now. Thanks to brokerages offering cooperative commissions through the MLS, they don’t have to push the listing you call about. They can show you stuff from every participating brokerage. If they don’t talk to you, they don’t get clients. If they don’t get clients, they don’t eat. While it’s true that we could probably do just fine with a culling of the Realtor herd, you don’t want EVERY Realtor to starve, do you? If they leave out a crucial factor on a sign, you’re more likely to talk to them. (Perhaps not as much in the modern era, but hey, there’s still a chance.)
Lastly, while printing prices may stop the current flock of scammers, real estate is too lucrative to ever eliminate every scam on the market. A handful of people lose out to real estate scams each year – most of them wind up using Realtors afterwards. Even if we were to magically overcome our cultural issues with publicly airing financial matters, leaving prices off is generally more beneficial to the public and to the industry than printing them would be.
Monday we’ll be returning to the Field Guide of Chicago Apartments to take a look at studios. See you then!