What are ‘Ghost Listings’?

Are ghost listings legal or is it fraud? To me the answer is no!

Ghost Listing “Ghost listings” are listings of properties that may not be on the market but are intended to drum up business for agents (posting the listing)  who hope to sell other similar homes, especially when hot markets start to thin out the inventory of available homes. This is not a new phenomenon and is more common than you’d think. But the big question is; does this fall into the classification of “bait and switch”? Some in the business would argue ‘yes’ and others argue’ no’. What it ultimately boils down to is the intentions and design of the adverting posted by the agent. This type of advertising, or customer attraction marketing has been around a long time and it does not appear to be going away any time soon.

ghost listings as a marketing strategy

One of the industries which has made a true art of ‘ghost listings’ is auto sales industry. Ads are often run of vehicles at ridiculous pricing and terms and buried in the ad is the caveat “1 at this price.” Now if that ad is run in a metropolitan statistical area of Los Angeles-Long Beach and seen by 3,500,000 potential car buyers, what at the odds you’d be getting your hands on that car? 1:3,500,000. But did the dealership run a ‘bait and switch’ ad? I’d say no. However, the dealership may have generated a few thousand prospective buyers of which a few dozen will buy a vehicle from that dealership! One car advertised generating dozens of sales.

Since the FTC has made it illegal for Realtors (and agents) to engage in the age old business prospecting of cold calling, Realtors and agents have to use alternative tactics  to build relationships with prospects. One of the best ways to legally accomplish this goal is to gain the attention of the prospect and compel that prospect to call the Realtor. The use of a ‘ghost listing’ is just one of the tools used to create a compelling action for the prospect to call. Here’s the tricky part–the property used to attract the prospect may have already been sold by the time the prospect calls–and the prospect may feel that they have been duped.

The real issue is was that advertisement implying the Realtor had an ‘exclusive listing’ for that property. It is not illegal to advertise property for sale, it is a violation when it is implied the listing is exclusive.

As a consumer, if you are living inside a vacuum about advertising, it’s about time you became aware of how the various forms advertising can be delivered. Claiming an Ad is ‘bait and switch’ for every time a property is not available when you call about the ad is naive (at best).

And for the advertiser–the consumer wants  content that is full of details  to help them make a decision–before they buy.

 

 

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Meet Gregg Cochran

Gregg Cochran has written 1 posts in this blog.

Offering commercial financing as real estate loans, Accounts Receivables (factoring), Purchasing of Notes secured by real estate (commercial or residential), Purchasing of business finance notes, Purchasing of structured annuities or structured settlements through affiliate company CFR Group.

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