Real Estate News: Agent Price Gouging Charges in California

By Travis Anderson

In 2011, Travis started his career over and began building his own team; a team that has a different look and feel than most teams in the industry; one built SOLELY for the betterment of the client.

I came across an article about price gouging allegations against Realtors® in California, and it raises some serious questions about ethical practices in real estate. The headline from the Santa Monica Daily Press reads: “Second Realtor® Charged in for Price Gouging Fire Victims.”

What is the situation here? Recently, a Los Angeles real estate agent faced charges for allegedly trying to rent a Glendale home to an evacuated family at over 50% above the listing price.

This isn’t the first time we’ve heard about these practices. Another agent was accused of raising the price of a rental home by 38% after being contacted by a couple who were looking for housing after the fires.

What exactly are the rules? In California, the cap for price increases during emergencies seems to be 10%. This means that if there’s a crisis, like wildfire, businesses can’t increase their prices without limits. I’ll give you a classic example of price gouging:

Imagine a home originally listed at $2,000. With so many people looking for a place to stay after a calamity, the calls come pouring in. Instead of renting to the first qualified renter at a fair price, the Realtor® or property manager chooses to rent to the highest bidder. This kind of behavior is troubling, which is something Realtors® and homeowners should be ashamed of.

In a truly free market, demand would drive up prices naturally. However, during times of crisis, we need to come together as a community and support one another to ensure that no one is taking advantage of those who are already in distress.

What do you think about this issue? I’d love to hear your thoughts. If you have questions about this issue or real estate in general, feel free to call me at (651) 485-6383 or message me at travis.travisandersonteam@gmail.com. Let’s connect.