When Groucho Marx said he didn’t want to belong to any club that would have him as a member, he was actually making a serious psychological point — being denied admittance to something can build interest in it.
For many real estate brokers, a similar mentality applies to open houses, especially in a challenging market where a full-court press is required for nearly every sale and, even, rental.
If apartment hunters enter a unit to find it chock-full of other buyers, the thinking goes, their level of intrigue will rise.
But to what lengths will brokers go to make sure those open houses are teeming with activity? While no flagrant legal violations appear to be taking place, some say brokers may be bending the rules.
One trick of the trade, according to brokers, is to invite friends and family over to mill around. Another is to pad sign-in sheets with extra names to make it look like crowds had turned up earlier in the day, brokers say.
Doug Heddings, a broker who created the three-year-old blog TrueGotham, recently wrote, “Give me a break! The deception is purely a vehicle to make it appear that more people have attended the open house than actually have.”
Heddings refused to elaborate because of the “sensitivity” of his posting, but did confirm that he once witnessed the practice at an open house. He also said he knew of examples of other agents suggesting that colleagues pad their sign-in lists. Few brokers will publicly cop to any sort of stagecraft, and most are even loath to single out rival brokers who “people stage” their properties.
“It’s not an ethical way of doing business, but who’s ethical today?” says Ira Lieberman, a Corcoran Group broker, who, like the others contacted for the article, strongly denied ever invoking smoke-and-mirror tactics at open houses.
But Lieberman agreed with Groucho’s analysis, saying that a packed house could signal to buyers that “something’s up,” for example, that an apartment’s price is a good deal. He equated it to the days that he worked in the women’s garment business, when manufacturers would secretly send employees to department stores to buy their dresses and create buzz about their products.
Perry Payne, a broker with Prudential Douglas Elliman, said: “I love it when I am in an apartment and there are three or four people there, and they are sizing each other up.
“It brings some sense of urgency,” she said. “We all want what the other guy has.”