Advertising is one of the easiest places for a brokerage to get into trouble, because every salesperson's business card, website and social media post is ultimately the responsible broker's responsibility. Every state regulates real estate advertising. The details below come from the California Department of Real Estate's Real Estate Advertising Guidelines; your state's rules will be similar in principle but differ in specifics.
No false, deceptive or misleading advertising
Licensees may not publish or circulate anything false, deceptive or misleading. The DRE stresses two points exams like to test:
- Carelessness is not a defense. Making statements a licensee should have known were untrue can lead to discipline, even without intent to deceive.
- A licensee should be able to substantiate any claim in an ad on request.
Related: What to Expect on Your State's Real Estate Broker Exam
Bait and switch
Advertising a "too good to be true" price or term to draw customers in, then steering them to something more expensive, is bait and switch. Limiting terms such as "terms and conditions apply" are allowed only if they don't materially change the advertised offer, and details must be available before the consumer signs anything. An advertised price or term that was never actually available is dishonest.
Disclose that you're licensed
In California, print advertising must disclose that the advertiser is a licensed salesperson or broker. Terms such as "broker," "agent" or "realtor," or abbreviations like "bro." or "agt.," satisfy this. An ad that hides the fact that a licensee is behind it is often called a "blind ad."
First point of contact materials
California requires licensees to disclose, at a minimum, their license identification number and the responsible broker's licensed name on materials intended to be a consumer's first point of contact, and an NMLS identifier if the licensee is a mortgage loan originator. These include:
- business cards and stationery
- websites the licensee owns or controls
- flyers, mailers and other promotional materials
- internet, email, radio and TV ads
- print ads in newspapers and periodicals
- for sale, for rent, open house and directional signs showing the licensee's name
If more than one licensee is named, each license number must appear. In written ads, the license number can't be printed smaller than the smallest type in the ad.
Brokerage names, DBAs and teams
- A broker may conduct licensed business only under the name on their license, or under a fictitious business name (DBA) that has been properly filed and licensed.
- Only brokers can obtain a DBA from the DRE, though a responsible broker can, by contract, allow a salesperson to use one.
- Team names are regulated too, so consumers can tell a team apart from a brokerage.
Keep ads current
Billboards, directory listings and websites can outlive the facts in them: a changed address, a new brokerage name, expired terms. Licensees should monitor long-lasting ads and update or remove anything no longer accurate.
The broker's role
Responsible brokers must reasonably supervise the activities of their salespeople and broker associates, and advertising is part of that. A written policy, review of new ads before they run, and periodic checks of agents' websites and social media are the practical way to meet the duty. Try our real estate broker exam practice questions.