NAR's new ad campiagn

Propaganda was formalized into the form we're familiar with now during World War 1 when then-president Wilson formed a committee to help sway public opinion towards entering the war. The rest, as they say, is history. Today every company on earth uses the lessons taught by the Creel Commission to sway the public into buying their wares.

A wide range of tricks are used, from the tireless repetition of the jingles we hear on TV to intentional vagueness, "Colgate! 9 out of 10 dentists recommend it!" (but do they only recommend Colgate? Or do they also recommend Crest as a viable alternative?). Of course, unlike a government, advertisers' goals aren't to subjugate your will, but simply to make their product indispensible.

Now the main difference between an investor and a speculator is that a speculator believes what he is told, while an investor believes what he tells himself. In other words, a speculator is a sucker, while an investor looks past the smoke and mirrors to make up his own mind.

The National Association of Realtors is trying to sell you the idea that you should be house hunting right now. Just for kicks, let's take a look at their claims and figure out the mean and nasty tricks they are trying to play on the unprepared.

*edit - This was originally going to be one post, but I had too much fun writing it and it got far too lengthy. So instead I'm going to break it up into more manageable pieces. It's easier to edit, and easier to read.

Right now may actually be one of the best times to buy a home. Consider these facts:

Even when they've begun, they are already started their little game. Look carefully at their claim, because one single word changes the entire sentence. If you said that word was "may", go get yourself a cookie. Anytime you see the word may, you can completely ignore whatever the claim is. Afterall, 50 years from now we may actually find out that President Bush is actually an alien.

Yes, I've used that word before myself, typically at the conclusion of an argument when I've laid my facts before you. However it is perfectly fair for you to read my articles and immeadiately eliminate any sentence with the word may in it, because in the end it's simply conjecture and worthless.

INTEREST RATES NEAR RECORD LOWS
Today's interest rates are comparable to 40-year lows, offering homebuyers a once-in-a-lifetime opportunity.

They have their facts right on this. Look at a graph of average mortgage rates over the last 35 years, as found on Mortgage-X;

As we can clearly see, mortgage rates are nearly as low as they've ever been. Here NAR uses the tactic known simply as inference. What they lead you to believe, but never actually say, is that if you don't get a loan right now your rates will be much higher. It would be too much for them to actually suggest that mortgage prices were going higher, there is not evidence that supports that. But they phrase their words to say it without actually saying it.

You can use these tricks too

While there are some that believe such tricks are unethical, most simply believe that it's stating your case as best possible. All methods of persuasion involve some sort of word manipulation. What NAR is doing here isn't illegal or unethical, it's simply advertising.

As investors we wear a variety of hats, from CEO to accountant, from secratary to marketer. Yes, if you don't consider yourself to be in sales, you aren't going anywhere as an investor. We have to sell our homes to tenants and to buyers, we have to sell our sales pitch to sellers. And we can learn a lot from studying a simple ad such as NAR's.

What did we learn from today?

• It's always safe to qualify statements with "may"
• Sometime you can say something very clearly without actually saying it.