Advertise Ethically

Use common sense in promoting “sold” listings.

August 1, 2004

Q.I advertise properties in print ads and on my Web site, featuring properties for which I’ve been the listing broker as well as the cooperating broker. What’s the acceptable length of time to include sold listings in my advertising. Is there a time limit?

A. The Code of Ethics doesn’t specify a time period for advertising sold listings. The most relevant guidance is in Standard of Practice 12-7, which provides that “only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have sold the property. Prior to closing, a cooperating broker may post a sold sign only with the consent of the listing broker.”

So the cooperating broker isn’t required to obtain the listing broker’s permission to advertise a property as sold unless the property hasn’t closed. After closing, there’s no restriction on posting such a sign, though the co-op broker should do so only with the new owner’s permission.

Article 12 also requires that REALTORS® present a “true picture” in advertising and representations to the public. True in this context means accurate and honest. For example, it would be inaccurate to state that the properties mentioned in your ad or on your Web site were recently sold when some had sold several years ago. Likewise, you can’t publish a list of sold properties from the MLS in a newsletter unless you’ve been involved in the transaction as the listing or cooperating broker or unless you disclose that the list represents many different brokers’ sales as reported in the MLS.

A good rule of thumb: Put yourself in the public’s shoes and consider how readers might perceive the advertising.

Q.I recently met an investor at my office before a showing. Since the investor didn’t want me to represent him, I explained that I would be acting as a subagent of the seller’s agent. The seller’s agent was offering compensation to cooperating brokers.

When we arrived at the house, the homeowner was there. Not only didn’t she leave, she immediately took the investor on a tour. Afterward, she and the investor discussed the possibility of owner financing. The investor didn’t make any firm offers but asked questions to see whether the seller would be interested in receiving monthly payments for some of her equity. The homeowner said she liked the idea of seller financing.

The next day the listing agent called to accuse me of negotiating with her client, which she said was “a violation of the rules.” Did my actions violate the Code of Ethics?

A. According to the facts you’ve provided, you didn’t violate the Code of Ethics. Article 16 and Standard of Practice 16-13 govern client ownership and contact. Article 16 requires that a REALTOR® avoid taking “any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.” Standard of Practice 16-13 states that “All dealings concerning property exclusively listed . . . shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.”

Bottom line: Because you were a subagent in a potential transaction—and therefore working for the listing broker—you didn’t violate the Code. Even if you had been a buyer’s agent, your actions wouldn’t have violated the Code because the discussions occurred directly between the buyer and seller, who chose to be there during the showing and indeed showed the property herself.

It seems that the listing agent expected you to communicate with the seller only through her. If I’m correct about her expectations, you disappointed her but you didn’t violate the Code of Ethics.

Bruce Aydt

Attorney Bruce Aydt, ABR, CRB, SRS, is a national real estate educator, a Missouri real estate broker, and past chair of the National Association of REALTORS® Professional Standards Committee.

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