September 25 Update
I spoke with the attorney for our local association and it is his opinion that while the sign is most likely a violation of the state law, it is on the line ethics-wise. However, What has happened in the meantime is that the State of Iowa licensing division has decided that based on the photograph itself that I sent inquiring about the legality, that they have gone ahead and opened an investigation in the matter. Evidently a letter went out to the broker of the agent and to the agent as well and now the signs are down. I received a letter from the state saying that the case was in progress and could take up to a year before a ruling is handed down. Either way, the signs appear to be down for now. Put a check mark in the Win column for the State of Iowa taking the case on and for the agent doing the right thing. Misleading the public is in my opinion both ethically and lawfully wrong.
Bravo!
*** UPDATE *** *** UPDATE *** *** UPDATE *** *** UPDATE ***
I have been in contact with the licensing division of the State of Iowa regarding this type of advertising in our state. This is entity in our state that has the most "teeth" when it comes to violations of real estate practices & real estate law. I have been told that there are problems with this type of advertising and have been invited to file a formal complaint to start the investigative process. My initial intent was and is to deal with this on a local level with my local Association of REALTORS®. I am still awaiting an opinion from our Association Attorney. What follows is the Iowa Law regarding Advertising by real estate brokerages and sales associates that apply to this situation.
193E-10.1(543B) Advertising. A broker shall not advertise to sell, buy, exchange, rent, or lease property in a manner indicating that the offer to sell, buy, exchange, rent, or lease the property is being made by a private party not engaged in the real estate business, and no real estate advertisement shall show only a post office box number, telephone number or street address. Every broker, when advertising real estate, shall use the regular business name or the name under which the broker is licensed, and shall affirmatively and unmistakably indicate that the party is a real estate broker and not a private party. Each broker when operating under a franchise or trade name other than the broker's own name may license the franchise or trade name with the commission, or shall clearly reveal in all advertising that the broker is the licensed individual who owns the entity using the franchise or trade name.
10.1(2) Real estate advertising shall not be misleading or deceptive or intentionally misrepresent any property, terms, values, or policies and services of the brokerage.
The laws of any state are always subject to interpretation. That is why a complaint process is in place, to test these interpretations. Each state has their own laws regarding this subject in our industry and may be totally opposite in your area to mine.
My intention with this subject is to apply the test of the law to this type of real estate advertising. If it is determined that this is an ok method of advertisement, I will accept that and move along. Thank you for everyone that has responded to this post. I enjoy seeing both sides of opinions and I look forward to sharing the outcome in the forum.
**************** ORIGINAL POST BELOW *************************
I was on my way home the other night and as I exited the freeway, I stopped at a red light of an intersection. It's not uncommon to see handwritten signs planted along city intersections, but this one caught my eye.
I thought to myself, "Wow... some For Sale By Owner has decided to get creative selling their house!" Then as I sat there a bit longer (it was a long red light), it seemed odd that a FSBO would have access to a toll free recording service.... As I drove away, I jotted the phone number down and called for the "Free Recorded Info". To my surprise, it was a local real estate agent!
That was it! I maneuvered back around the block to get another look at this sign. This time I took out my camera and snapped a couple of quick photos. I also wanted to verify that I had written down the correct phone number...
It wasn't until I got home, downloaded the photo's from my camera and zoomed in on the image that I discovered that at the very bottom of the sign was the name of the real estate company.
I know that NAR's Code of Ethics deals with proper advertising.
"• Standard of Practice 12-5
Realtors® shall not advertise nor permit any person employed by or affiliated with them to advertise listed property in any medium (e.g., electronically, print, radio, television, etc.) without disclosing the name of that Realtor®'s firm in a reasonable and readily apparent manner. (Adopted 11/86, Amended 1/07)"
This section deals with misleading the public in any advertising. And this sign clearly does not fall within the Standard of Practice 12-5.
But what bothers me more than anything is what does the public think about this type of advertising? What are your thoughts? Is this simply "creative marketing" in a time when listings are plentiful and buyers are few? Or is this an egregious method to trick a buyer and capture their telephone number?
What's next? Sandwich boards?
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