Legal QUIZ

Test your knowledge of real estate advertising

BY WILL MARTIN, GENERAL COUNSEL

Questions

1. Is it ethical for a listing agent whose property has gone under contract to put a “sold” sign on the property and/or indicate on the internet (social media, website, etc.) that it has been “sold” prior to closing?

2. May a listing agent advertise that they have “sold” a property after closing if they did not represent the buyer?

3. Is it ethical for a buyer agent, whose client has put a property under contract, to advertise that the property is under contract without the listing agent’s permission?

4. Can a buyer agent put a “sold” sign on a property after closing?

5. If a buyer agent tours a listed property with her client, is it permissible for the buyer agent to post her own photos of the property on her social media without permission of the listing agent’s firm, if she gives credit to the listing firm?

6. May a REALTOR® advertise properties on her website/ social media that her buyer clients have purchased without the consent of the firms that listed the properties or without including the listing firms’ names?

7. If a REALTOR® changes firms, may he continue to display the properties he helped sell while he was affiliated with his old firm on his website/social media?

8. May a REALTOR® include another firm’s listing in her print or social media advertising without the other firm’s consent so long as the other firm is identified?

HOW DID YOU DO? Discover the answers below.

Answers

1. Yes, it is ethical. However, listing agents are advised not to advertise a property as “sold” unless and until it has closed based on guidance from the NC Real Estate Commission that the term could potentially mislead the public, which understands the word “sold” to mean a fully completed transaction. [Use of “Sold” signs on property that is under contract Category: Advertising]

2. Yes. Although brokers may draw a distinction between “listing” a property and “selling” a property, the average person probably does not. So, the use of the word “sold” by the listing agent would not be considered misleading in violation of the real estate license law or the Code of Ethics. [Advertising “sold” properties as a listing agent Category: Advertising]

3. Standard of Practice 12-4 of the REALTOR® Code of Ethics prohibits REALTORS® from advertising property without authority. Even if the buyer agent’s purpose is to promote the agent’s services, it’s still advertising the property from an objective point of view. Thus, in order to avoid a potential complaint that they have violated Article 12, cooperating agents should obtain permission from the listing agent prior to closing before advertising that the property is under contract.

4. Yes. Provided that the purchaser gives the buyer’s agent permission to do so, it is permissible under the Code of Ethics and the real estate license law for a buyer’s agent—who was involved in a transaction that has closed— to claim that they “sold” the property and to put a “sold” sign on the property without having to get approval from the listing agent. [Can a buyer agent put a “sold” sign on property after closing? Category: Code of Ethics] 5. As noted in the answer to question #3, even if the buyer agent’s purpose is to promote her own services, she is still likely to be considered as advertising the property. The prohibition in the Code of Ethics against advertising another REALTOR®’s listing without their express permission applies to any kind of advertising, including social media advertising. An MLS’s IDX rules allow a participant to create a limited electronic display of another participant’s listing, but the display must comply with the IDX rules. [Can I advertise another firm’s property on social media? Category: Advertising]

6. Yes. Neither the real estate license law nor the Code of Ethics obligates a buyer agent to obtain a listing firm’s consent in order to advertise the completed sales transactions in which she participated or to mention any of the listing firms’ names. [Advertising “Sold” Properties as a Buyer’s Agent Category: Code of Ethics]

7. Yes, provided that viewers would understand that some of the sales had occurred while the agent was affiliated with a different firm. [May I advertise my role in sales after leaving a firm? Category: Code of Ethics]

8. No. While it wouldn’t violate the Real Estate Commission’s advertising Rule, advertising another firm’s listing without authority is a violation of the REALTOR® Code of Ethics. Even though the other firm and its client might not object to such advertising, the lack of objection cannot be assumed. [Can a REALTOR® include one of my listings in her print advertising without my consent? Category: Advertising; Can I advertise another firm’s property on social media? Category: Advertising]

STUDY HARD: If you’re not doing so already, be sure to read the Q&As that appear in the REALTOR® Rundown every Monday.