As marketing channels grow broader in their reach, it is critical to remember a few rules when advertising yourself and your listings, whether electronically or through traditional methods. In all of your advertising, don’t forget to comply with Article 12 of the REALTOR® Code of Ethics, which requires that you be truthful in your advertising and that you disclose your status as a real estate professional. Beyond these underlying requirements, here are answers to some often-asked advertising questions.
Q. What are the Code of Ethics requirements that apply to all forms of advertising?
A REALTOR® must obtain the consent of the seller or the landlord prior to advertising a specific identifiable property. (Standard of Practice “SOP” 12-4).
To comply with the Code of Ethics, advertisements must include:
- Your firm’s name, in a reasonable and readily apparent manner. (SOP 12-5).
- Your status as a real estate professional.
- On websites, the state where you hold a real estate license in a reasonable and readily apparent manner. (SOP 12-9).
- On websites, these disclosures may be made available via a link to a website that displays the required information. (SOP 12-5).
Wisconsin law further requires the disclosure of the licensee’s name as displayed on their license and that all advertising occur under the supervision of the broker.
Q. When should I use the REALTOR® logo or the term "REALTOR®"?
While you are strongly encouraged to use the REALTOR® logo or the term “REALTOR®” in your advertisements, you are not required to do so. Article 12 requires that you state your professional status, such as principal broker, associate broker, appraiser, sales associate, property manager or real estate licensee. If you do choose to use the logo, you must include the “®” registered trademark symbol.
Q. I want to post articles and start discussions with clients and other agents on my social media sites as a means of advertising my knowledge and skills. Are there any concerns I should have?
Social media is a widely used means of electronic advertising, and the posting of relevant articles or videos is a great tool to position yourself as a resource for current and future clients. If you choose to advertise through social media, you are responsible for ensuring that the use of the site is consistent with the Code of Ethics; local, state and federal laws; and all applicable real estate licensing laws and regulations.
When advertising on social media, you should familiarize yourself with the various media platforms’ privacy policies. The information posted on social media sites may be taken by other users and forwarded or shared for purposes other than originally intended. This is a frequent occurrence, and client information that is not meant to be public should not be posted.
If you post on a site that allows comments and participation, be mindful of two things. Although there is some case law to indicate that a blogger is not liable for information posted by a third party on their blog, NAR has taken a different approach. SOP 15-3 states:
The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses, and competitors’ business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. (Adopted 1/10).
As a REALTOR®, you therefore have a higher level of duty than a member of the public. If you operate a blog, you must delete false or misleading comments or publish clarifications about them as soon as you have determined they are false or misleading.
For a more detailed discussion on social media practices, see www.realtor.org/ae/manage-your-association/association-policy/create-a-social-media-usage-policy.
Q. An agent has a listing for a property. One day while searching the real estate advertisements posted on Craigslist, the agent discovers that her listing has been advertised on Craigslist without her permission and instructs interested parties to “call Jane at 207-3214 to Schedule a Showing.” The listing agent is curious and calls the number. In talking with Jane, the listing agent discovers that Jane is another agent who placed the advertisement on Craigslist in order to attract potential buyers. Is this ethical?
There are many potential violations of the Code of Ethics and state licensing regulations wrapped up in this question.
SOP 12-4 of the Code of Ethics states that “REALTORS® shall not offer for sale/lease or advertise property without authority.” That authority can only come from the seller or the listing agent. Because the listing agent called Jane, we can assume that she did not give Jane permission to advertise her listing. If Jane did not receive the seller’s permission to advertise the property on Craigslist, then this may be a breach of her ethical obligations. The Wisconsin Real Estate Examining Board (REEB) rules and regulations also contain a similar requirement. These regulations prohibit a broker from advertising a property if the broker does not have the consent of the seller. See Wis. Admin. Code § REEB 24.04(3).
If Jane did receive permission from the seller, then that would raise a separate question about how she was able to obtain permission directly from the seller to advertise the property on Craigslist without going behind the sign or interfering in the listing agent’s relationship with the seller. SOP 16-13 states that all dealings regarding a property listed with an agent must be conducted through that agent unless the agent or broker has given the other agent permission to contact the seller directly or the seller has initiated the conversation.
Some have defended this practice by arguing that additional advertising exposure would not harm the seller, but rather, may help get the property sold. This argument misses the point. The seller has a right to control who can advertise the property for sale. There are a number of reasons why a seller may not wish to allow someone who does not represent his or her interest to be advertising the property. Therefore, we cannot assume the seller would consent to another agent advertising the property for sale. The rules outlined previously recognize the seller’s right to authorize other agents to advertise the property and allow for that possibility.
In addition, this advertisement does not disclose the fact that the person who posted this advertisement on Craigslist is a real estate licensee. REALTORS® are required under Article 12 of the Code of Ethics to ensure that their professional status is clearly identifiable in any advertisement. Examples would include but are not limited to the following: salesperson, broker, agent, associate broker, REALTOR® — including use of the REALTOR® logo, broker-owner or sales associate. The advertisement also does not indicate what firm the agent who posted the advertisement is affiliated with. SOP 12-5 requires that REALTORS® must disclose the name of their firm when advertising a property for sale.
Q. Let’s now turn our attention to pictures. It has become standard for MLS listings to attach photos of the property to the listing. How do you select your pictures, can you alter them, and what are the consequences of posting pictures on your MLS listing?
First, let’s address the issues surrounding the choice and modification of pictures. If the pictures of the house highlight some of the problems of the property, can you “clean up” the photos? I believe that any time you make a material change on a photo that alters the physical condition of the property, you may be violating Article 12 of the Code of Ethics. Article 12 requires that you present a true picture in your advertising and real estate communications. However, as always, there will be some clear violations while other allegations may yield different results from different panels. Examples of clear violations would be erasing a visible crack in the foundation or filling in a hole in the roof. But what about removing the dandelions in the grass or removing a cloud in the sky?
Now that you have selected your pictures, it’s time to post them in your local MLS and attach them to your listing. Most MLSs address the use of pictures in their rules. You agree to abide by these rules every time you upload a picture. While you should check your local MLS for additional details, here is a general summary of these rules:
- The listing agent represents that he or she has the right to upload the pictures to the MLS.
- The listing agent gives the MLS permission to use the photos.
- Photos and images are uploaded on a per-listing basis and are not transferable to another subsequent listing.
Other articles under the Code of Ethics, such as Article 2 — misrepresentation, concealment or exaggeration of pertinent facts about a property — and Article 10 — prohibits discrimination based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation and gender identity — also impact how social media can be used by REALTORS®, so you should familiarize yourself with the content of these articles.
Q. I have seen “coming soon” signs up for months. What is a reasonable use for a “coming soon” sign?
You should be particularly careful about using “coming soon” signs. While some agents use these riders legitimately, other agents use them as a way to pocket listings. Your local MLS will have rules that determine how quickly you must enter the property into the MLS after signing a listing agreement. For example, the requirement for South Central Wisconsin MLS indicates that MLS listings must be entered into the MLS system seven days after the effective date — first day of the term — of the listing contract.
Many agents post a “coming soon” sign on the property before listing the property in the local MLS. This may be permissible under your MLS rules only if it is specifically addressed in the listing agreement between the broker and the seller. If allowed, and the seller wishes to advertise the property as “coming soon,” your listing agreement should authorize the broker to withhold the listing from the MLS for a specific period of time for that specific purpose. As an agent, you may recommend that the seller withhold the listing from the MLS if he or she has a legitimate reason, such as making repairs, for keeping the property off of the market. An illegitimate reason would be keeping the property off of the market to give you or your firm sole access to the property.
As always, when deciding whether to use a “coming soon” sign, the decision must be made based on the client’s informed determination of what best serves the client’s interests. Failure to act in the client’s best interests by marketing the property more so for personal gain, such as listing exclusivity, can be a violation of the REALTOR® Code of Ethics.
If you and your sellers decide to advertise a listed property with a “coming soon” sign, make sure you check any MLS rules regarding “coming soon,” include all required Code of Ethics disclosures, and have a detailed conversation with your client(s) about the pros and cons of such marketing. Given Wisconsin agency law, if advertising property prior to the listing, review pre-agency considerations in the August 2015 Legal Update, “Real Estate Advertising Considerations,” at www.wra.org/LU1508.
Sarah Louppe Petcher is the General Counsel for the Northern Virginia Association of REALTORS®, an association with 12,000 members.