Ethical Issues In Real Estate Promotion

Mini Paper 1: Ethical Issues (Promotion)

It is becoming more difficult for first-time homebuyers to purchase a home in San Diego. According to Yahoo News the median price for a house in San Diego is a daunting $500,000, yet we continue to see advertisement of homes starting at the low $300s. Is that price really true or is it just a way to lure prospective buyers to purchase a more expensive home by using 'bait-and-switch advertising'. Bait-and-Switch advertising is a dishonest sales practice in which home developers advertise a lower price for a home in order to attract home buyers and then inform the prospective home buyer that the advertised item is no longer available and attempt to sell the customer to a more expensive home. Based on my home buying experience, I found this to be a common marketing method used by home developers and real estate agents.

I experienced bait-and-switch advertising during my interaction with Escala, a new home development in Mission Valley, three years ago. When I first saw the area being prepared for home building, I was anxious to find out details about the home such as square footage, plans and most important the starting price to determine if I would be able to afford to buy my first home in this new development. As I was driving home one day I saw the first advertisement from this developer that stated "Escala- your life, your style, your home, starting in the high $200s". I was pre-approved for a home loan of $320,000, so based on their advertisement I would definitely be able to afford to purchase a home in this new development. When the sales office for Escala first opened, I put my name on the waiting list and asked to see the home prices. At the time none of the sales personnel had any information on pricing but they had plenty of information on floorplans, communities, home colors and 3-D computer generated pictures of the homes. The homes were not expected to be built for another year, but the home sales for the first phase were just a couple of months away. A month later I noticed the advertisement that once listed the starting price in the high $200's change to the low 300's yet the sales office still had no information on actual home prices but was told