This Article has gotten a lot of attention recently - especially for Realtors® who have embraced the internet as an advertising medium. Renee Burrows wrote a great post about Article 12 to check out, as well.
Here I will go into some details about Article 12 - the Article in the National Association of Realtors® Code of Ethics that deals expressly with advertising.
According to the National Association of Realtors® Preamble to the Code of Ethics, "The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations." For those of you who have missed them, please check out my recent posts on The Code of Ethics: Articles 1-11.
REALTORS® shall be careful at all times to present a true picture in their advertising and representations to the public. REALTORS® shall also ensure that their professional status (e.g., broker, appraiser, property manager, etc.) or status as REALTORS® is clearly identifiable in any such advertising.
Some of the practices that this Article covers are:
- A Realtor® may advertise that their services are "free" so long as the terms and conditions of the "free" services are clearly disclosed. Further, if a Realtor® is offering a "free" service but will be getting compensation from another source, it needs to be disclosed.
For example: Realtor® Rita advertises "Free Buyer Representation" in one of her ads. She knows that when her buyer finds and closes on a home with her, she will get paid from the Seller, via the listing agent. Rita is allowed to advertise "free" so long as her buyer understands all the terms surrounding how Rita will get paid.
- A Realtor® offer "premiums, prizes, merchandise
discounts or other inducements to list, sell, purchase, or lease ... even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer." This is perfectly ethical. The Realtor® offering this MUST disclose all of the terms and contingencies in a clear and understandable way. Also, if the law of the governing state does not allow this, then the state law supersedes this. Please check your state Association for details regarding this.
- (This one seems ridiculous, but it obviously was an issue?) "Realtors® shall not offer for sale/lease or advertise property without authority. When acting as listing brokers or as subagents, REALTORS® shall not quote a price different from that agreed upon with the seller/landlord." Basically, if a Realtor® does not have permission or a sale agreement with a client (authority) for a particular property, then the Realtor® is not allowed to go around telling people it is for sale. And if they DO have the authority to market its availability, then it is the Realtors® responsibility to advertise it only at the price agreed upon in the contract. Duh.
- If a Realtor® is selling/leasing a property that they have ownership interest in, both the ownership interest and Realtor® status must be disclosed. (For more on this, please check out Articles 4 and 5.)
- The only two people allowed to claim that they "SOLD" a property are the listing agent (represented the Seller) and the selling agent (represented the Buyer).
With all the new advertising being done on the internet, Article 12 has gotten several new changes and additions. Here is a breakdown of what is new to the Code of Ethics, as of January 2007:
- Any advertising (even online) MUST disclose the "name of that REALTOR®'s firm in a reasonable and readily apparent manner." This applies to both single agent websites as well as company ones. It is not fair to the public to look at an ad and not know who or what is selling a property or service. This also applies to "stealth sites" that Realtors® have had running on the internet for some time now. (A stealth site is a site that is very basic, offering no branding of an agent or company. The theory is that a consumer will feel more inclined to leave their information on a stealth site, vs. a branded one.)
- If a Realtor® is going to display information on a website, it must be current and accurate. I can't tell you how many times that I have been on an agent's website and tried to find the property in the MLS only to find out that it had SOLD 4 months ago! How is a consumer supposed to get any idea of the market when the data provided is that out dated? This was a much needed guideline laid out by NAR. I'm glad that they added this.
- When creating or driving traffic to their website, a Realtor® MUST not misrepresent who they are and what they offer in any way.
- They cannot use or manipulate another real estate websites to make the public think it is their own.
- They cannot use "content developed by others" without express permission of the creator.
- They cannot be deceptive in their use of "metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic"
Ultimately, A Realtor® must not mislead or deceive the public in any way. (DUH!!) And if a Realtor® hires a company/person to build and maintain a site, then that hired person must also adhere to these rules as well.
- Any Realtor® that plans on sharing or selling consumer information gathered from their site must disclose that possibility "in a reasonable and readily apparent manner." I like to know my competition. I also like to know what the public is looking at online. So, I often visit many sites and peruse around and at times am prompted to leave my information. I do (and I also make sure that I mention that I am an agent...). Often times I am called or emailed by a multitude of people that my information was shared with. How annoying! This new part of the COE would let consumers know ahead of time that their information may be shared with others. Then they can make an informed decision about how much info they want to share. Thank goodness!
All of it boils down to this:
Realtors® are bound by the Code of Ethics to advertise their listed properties and services in such that does NOT mislead the public in any way.