Cheats and tricks in real estate advertising | Japan Property Central

Japan has rules that regulate real estate advertising to consumers, but they are self regulated by nine organizations across the country. One of those organizations is the Real Estate Fair Trade Council of greater Tokyo.?According to the Council, the number of illegal advertising tricks by real estate companies is increasing online.?The most common of these tricks is bait-and-switch and misleading advertisements.

Read on to find out how you avoid falling for these tricks.

The old bait-and-switch

Bait-and-switch ads are frequently seen in rental property listings. They are most commonly seen in the 3 following ways:

1) The property does not exist at all, and was created by the agency.

2) The property has already been leased but is still advertised.

3) The property exists, but was never made available for rent.

Why do companies use bait-and-switch? By placing ads for properties priced below market values, the listing will receive a lot of hits and inquiries from interested tenants. After receiving an inquiry on the non-existent property, the agency may inform the customer that the property has just been leased, or has some faults, and then suggest other suitable properties they may be interested in.

Naturally there are times when an agency forgets to update their listings, but this also constitutes a rule violation. There are, however, many agencies who knowingly continue to advertise old listings. Some agents may go so far as to slightly change something about the listing, eg. change the floor size, building age or rent, in order to avoid being caught out.

Misleading advertisements

In addition to bait-and-switch techniques, there are many cases of misleading advertising by real estate agencies.

In a sales transaction, there is a special particulars document presented with the contract that outlines any known faults with the property. For example, if part of the land is sloping, if there are high-voltage power lines overhead, if the land is an irregular size that prohibits use, and so on. It is not uncommon for known faults to be intentionally left out and not disclosed to the buyer. For a buyer, finding a property advertised below market price and without any disclosed faults may seem like a good buy, but in reality it is not.

The following are examples of the complaints the Council has received regarding advertisements on rental properties:

• ?The property turned out to be room-share. Eg. The property was advertised at 25,000 Yen/month, but in reality it was a 150,000 Yen/month property shared among 6 tenants.
• The year of renovation is shown, rather than the year of construction. Eg. A building dating from 1962 was advertised as being built in 2011, when this was actually the year it was renovated.
• Cheaper than market rent. The property turned out to have a 3-month half-price rent campaign. Although the campaign is not a violation, the listing advertised the discounted rent, rather than the true figure.

Another misleading practice is to avoid advertising the management fee charged on top of rent.

In May 2012, the rules were revised, making it necessary to expressly indicate in the contract the amount of fees payable by the tenant, such as those due to the guarantor company and fees to replace the keys. While some agencies are still becoming aware of the changes, there is still a chance that the tenant has not been made aware of the additional fees required when moving in, other than key money and the deposit.

Beware of relatively cheap properties

So how can you avoid falling for some of these advertising tricks?

1) Research market values and be suspicious of properties below market price. When searching for properties in your desired area and size, you will begin to get an idea of the average market price. When you find something priced relatively low, be aware that there may be some faults with the property, or that it may be an advertising trick.

2) Avoid untrustworthy real estate agencies. If you inquire on a property and they immediately tell you there is something wrong with it and suggest something else, walk away. You can also report suspicious looking listings to the portal site they are listed on, or to the real estate fair trade council in that area.

Properties listed on some major portals will conduct their own evaluations on real estate agencies before allowing them to list properties on their site. They may also conduct random inspections of agencies and confirm the validity of the properties listed.

Source: Suumo Journal, September 3, 2012.

Source: http://japanpropertycentral.com/2012/09/cheats-and-tricks-in-real-estate-advertising/?utm_source=rss&utm_medium=rss&utm_campaign=cheats-and-tricks-in-real-estate-advertising

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