Is It Illegal....
Is it illegal to run an ad for a house for sale if you don't really have a house for sale, and just tell the person, "Oh, I don't have that house anymore, but would you like me to keep your name and number so that when I find another great deal I can give you a call"...and the reason for doing this obviously being so you can build a decent list of people that are either in the market for a home, or investors looking to buy.....thanks for any feedback..... 
[addsig]
I wouldn't think it's illegal. It's worked for me pretty well.
Yes it is illegal. you will probably never be prosecuted, but it is false advertising. To CYA yourself you should be getting houses under contract and just wholesale them out.
Unless you are getting investors, it would seem to me like a waste of time, since most home buyers have a limited window of time that they will look before they settle on a place. By the time you get there number and then find a deal most of the numbers you collected (I would think) would be dead leads. But I dont do what you are doing, so I wouldnt know.
Be very careful in your deceitful practices, you might end up with that one little old lady that puts you on one of those Channel X at nine reports. Once you hit that level, your best bet would be to move out of town with a lesson learned. I would also suggest you look into Subject to, or one of the other courses, you will spend less time collecting dead leads, and more time making money.
But then again, some of my best deals are clean ups from people that have tried that same mentality when putting a deal together, so keep up the good work lol.
Good Luck,
Kyle
do not say "i don't have that house anymore..} thats a lie. say "i don't have any available at this time,what are you looking for, i keepyou in mind.......ect.} and yes it does work........kenmax
I agree with Ken Max. Not only are you are walking a fine line if you claim you have had a house you never possessed to begin with. However, just saying that you have no inventory at this time and building your buyers list is a good idea.
Kyle came across a little strong, but he is correct about your buyers' list if you are trying to retail.
How many houses do you buy to resell in a year's time? If you do less than 10 a year, or haven't even bought one yet, cultivating a buyers' list is a waste of your, and more importantly, thier (the buyer's) time.
As Kyle said, most buyers have a time frame in mind when they are looking for a property. If you don't even have one under contract to buy when they call you, likely they won't be available when you finally get one. Buyers wanting owner financing, lease-options, rent to own, or the like might wait a bit longer, but still there are other options out there.
When you actually have a house, you'll get many phone calls on it. Some won't be interested in that house, but might like something else. That's a buyer for your list. Others will call after you actually have sold it. That's a buyer for your list. There is really no need to run a fake ad, in my opinion.
Roger
BTW,
it is illegal. As stated above, false advertising.
Roger,I could not agree with you more. Before running an ad to find buyers have something to sell them. Wannabe REI's who run these false ads give legitimate REI's a bad name.
ouch! wannabe REI? lol....thanks a lot for all the advice, I love this site, and everyone here is so helpful, it is great....Good luck and happy investing....
You could have many houses for sale. Do you have kids? They could be dollhouses or doghouses.
Can you tell that I am currently in automobile marketing? The reality is that yes you may not have that house right now but you may soon and you could possibly help. How do you feel do you think you are wrong can you sleep at night?
You would probably never hear a word about false advertising. I would not worry about it at all. I would be more concerned about getting in trouble for tearing off a mattress tag.
:-D
keninvest,
I do not have kids, I am only 21, not ready yet....actually my father does own quite a few RE properites in Central florida, so if anything I could say I was advertising for him for a fee....so that could be my out, not that I would ever have to use it....I would sleep fine at night...lol....(I do every night, as I hear from my bedroom window the waves of the ocean splashing the shore line)....How did you know that I tore the tag off my mattress?? BUSTED!!
Not only is it illegal, it is immoral, which is a greater evil. If I know anyone contemplating or using this practice, I guarantee you that I will never deal with them. Real estate investing, over the years, has gotten a very bad name from all the beachfront property being advertised for sale that does not exist. Your "inventory" does not exist, either.
Learn to be honest, if it's not too late!
And since you are in Florida, you should pay tremendous heed to Florida Real Estate law and the requirements of the Department of Business and Professional Regulation. Ask Dad about them. You might say Florida RE law does not apply to you since you will be a principal to each of your deals and that you are not a licenses real estate agent. But beware, especially if you are dealing with an out-of-state individual. Florida long ago said that if you sell RE in Florida you must be licensed in FL. There was too much "beach" property in Santa Rosa "Beach" and elsewhere being peddled to unsuspecting buyers in Chicago, Des Moines, and other cold, cold places up north.
Seriously think about what you are doing. It's no laughing matter.
Bob[ Edited by bogie7129 on Date 04/23/2004 ]
Ok I will play this game for a minute. I was looking for a home a couple of years ago before I got into REI and I noticed an add that said "I have homes for sale all over town just give me a ring". I called the guy and he said he could probably help me out. He put me in touch with a man who had a home that I ended up purchasing. I feel great about the deal and I am sure the guy that ran the ad got paid. I love my home it is exactly what I wanted so was he wrong?
I would also like to know what the LAW says about this issue. Everyone says it is illegal but I can't find it.
Ethics are something to worry about when someone is harmed in this case what is the actual harm? I am not talking about some intricate Florida land scam. I am talking about finding prospects and generating legitimate commerce.
[ Edited by kensinvest on Date 04/23/2004 ]
bogie7129,
For starters, ""Florida long ago said that if you sell RE in Florida you must be licensed in FL""......tto be paid a commission, you have to be licensed, if you are paid based on a fee, you do NOT....""Not only is it illegal, it is immoral""...are you serious?? immoral??? adultery is immoral, robbery is immoral...running an ad for a property that I may of may not have, or for another investor would not fall under IMMORAL....come on buddy, aren't you being a little extreme.....
Why couldn't you run an ad that says "looking for a house?" or "investors needing houses?" call 555-1212
I agree with most on here though. Keep your dealings on the up and up right from the beggining, you young punk! :-D
Oh, and one more thing. Never, ever tear off a tag from a mattress! [ Edited by Ricker on Date 04/24/2004 ]
Ricker (old timer),
I like the wording "looking for a house"....I tried to call the 555-1212 though and got directory assitance.....my trial for the mattress tag tearing is in 2 weeks, wish me luck.....
I was in that position once ,looking for a house for my www.family.Called the number the person said they did not have a house just trying to compile a list. No harm done because I bought a house later.But i was still a little irratated. If you dont have a house to sell DONT advertise like you www.do.I realize this a business ,but it should be done with ethics.Just my 2 cents worth
Take Care
Tim
""I was in that position once ,looking for a house for my family. Called the number the person said they did not have a house just trying to compile a list"".....was that person not compiling a list of buyers that are in the market for a house?? are you not a buyer in the market for a house??? what is in the harm of him having your number incase he comes across a great deal and gives you a ring??? is that really irratating??......maybe I look at a glass of water half full, while you see it half empty....
False advertising comes in many flavors and shapes. One shape is fraud, advertising something as one thing when it is another. If i tell you that my used car is in great shape and infact the transmission is full of sawdust to keep it from jumping out of gear that is fraud and, if you purchase the car, I am probably liable. The real estate equivalent is selling Beachfront property that hasn't got a beach.
But this is pretty clearly understood as deceptive. However the ground-breaking case about false advertising was against Sears. The government alledged that Sears routinely advertised products at attractive prices knowing that there were, in fact, no such products in the stores. The idea was that once customers were in the store they would buy something and if it wasn't the $500 table saw on sale for $250 then maybe they'd buy the $250 table saw on sale for $249.00.
The ruling in this case led to such practices as the rain check (if you don't have it in the store now you'd better get it or be guilty of false advertising) and the ubitquitous "limited quantitites available".
Now, your plan to advertise for a house you do not have in hopes that you are going to find a buyer for some house you may have later is not in the same league as Sears. The odds of your being prosecuted are extreemly slim. Wording the ad to imply that you frequently have houses (but may not have any at the moment) will help you out here but the odds of even a badly worded ad getting you in trouble are pretty slim.
I do, on occasion use this technique but never for something as routine as houses. As has been pointed out here the market place for selling houses you actually own is pretty efficient and you probably do not need to resort to such endeavors. I do, on occasion, however, develop odd properties (rock and roll rehearsal spaces, for example) for which it is difficult to assertain whether there is, in fact, any market in a given location because no such facilities exist to attempt to determine vacancy rates. On those occasions I have run an ad saying that I had units to rent and giving a phone number. Immediatly on the caller identifying themselves and the purpose of the call I explain that I do not actually have any such units but am doing a market study preparatory to building them and I have questions I would like to ask them. If they hang up (which has never actually happened) I shrug my sholders and go on with my day. But most of the time people are delighted to tell you what they are looking for, what ammenities would be important to them and what locations would be best. Again, this is a specialty product for which there is currently (as a rule) no supply so people looking for such things are delighted to try to convince you that you should provide them.
Even if they later charged me with false advertising the question arises, "What are their damages?" They made a phone call. I'll refund their quarter. Now, if i took a deposit on a unit I don't have that would be fraud and I'd legitimately be in big trouble.
By the way the mattress tag only applies to those other than the final consumer, as the wording on the newer tags makes clear. You're safe.
As to the issue of general trustworthiness and being true to your word. I'm in favor.
thanks for the post commerical....some people think in the box, and some people think outside the box....my guess is you do very well for yourself......and Tim, I wasn't blasting your post, I was just showing you my point of view of your situation....
Hey,
So many interesting points in this thread, that I just could not hold myself back from adding to it.
My first point is if you run an ad like this "Fixer Upper, $55k, Seller Desperate, xxx-xxx-xxxxx" and the marketplace is HOT, your phone will not stop ringing. If that is a good thing or bad thing, is up to you to decide, because the vast, vast, vast majority of the people calling have never and will never buy RE. They are the endless dreamers in our industry. I have seen some Wholesalers who have 2000+ names on a list, that get 1 or 2 people to call them back on a house. These are people who had requested to be sent information.
So if someone calls and you don't have a house you say "Ha! You would not believe how many people have called me. I could have sold this house 10 times over!! I am sorry to say, this house is not available anymore. Hey, let me ask you do you buy investments houses....".
So for all you people out there that think the Attorney General's Office is reading the classified section of the local paper looking for ads like this one, grow up. So if it is illegal or not, becomes a completedly moot point.
Hey CommericalKing you are on top of your game, I look forward to reading more responses from you.
Hey, some people can come home and kick their dog across the room and never feel bad about it.
If you guage your ethics only based on the results that would happen if you got caught by someone in power to do something to you, then guess what?
You don't have any ethics.
If you guage your ethics upon a set of standards that you follow each and every day, no matter what your competition is finding successful then you have ethics.
If I can't tell what I did to my: Mother, my wife and my priest, then I shouldn't be doing it.
I'll throw in If I can't tell what I did to a: reporter that wants to put me on the 6 oclock news, then I shouldn't be doing it. for those who base their ethics on the results that would happen if you got caught by someone in the power to do something to you.
Since you are in florida:
Here is the Florida Statute that applies to this:
475.43 Presumptions.--In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or salesperson. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.
I think some of the replies were a little extreme... immoral? dishonest? and what about his mother?
Anyway, I think it depends how you word the ad. If you say 3 BR/ 2 BA, etc that would be very misleading. But if you just say "Buy a Home from Me, Low Dn. etc" what's wrong with that?