License Law: Advertising

What is considered advertising?

Advertising is defined in the license law as any manner, method or activity  by which a licensee makes known to the general public, properties for sale or lease or any services that require a real estate license. It includes newspaper, magazines, radio television, yard and other signs, websites, business cards, billboards, car placards, postcards, etc.

Q 1: Can I advertise the commission rate that I charge?

A: Yes. There is nothing in the Code of Ethics, license law, or antitrust laws that prohibits advertising your own rate.

Q 2: In the area in which I list properties there is one school district which is very desirable. Is there a fair housing problem if I establish a policy of only advertising the school district for my lisings that are in the desirable school district and not advertise the school district on my other listings?

A: There is a potential steering issue. Steering is the channeling of buyers or tenants to a particular area on the basis of race, color, religion, national origin or other protected class. This practice is prohibited by the Fair Housing Laws. If you want to advertise the desirable school district, the cautious approach would be to advertise the school district on all your lisings. It is best to advertise the school district on all your listings or none of them.

Q 3: My agent wants to send a letter to residents of a certain area listing the homes she sold in that neighborhood. Can she claim to have “sold” houses where she was the listing agent as well as those listed by another broker, but on which she was the selling agent?

A: Yes. Standard of Practice 12-7 of NAR’s Code of Ethics provides that only REALTORS who participated in the transaction of the listing broker or cooperating broker may claim to have “sold” the property. As the agent participated in these sales as the listing or selling agent, she can use the term “sold” in her promotional letter.

Q 4: I represented a buyer in purchasing a home. The transaction will close today and the buyer will take possession upon closing. The buyer has consented to me placing a “sold” sign in his yard. Can a buyer broker use the term sold on a yard sign?

A: Yes. Standard of Practice 12-7 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. As you are the selling broker you are permitted to use the term sold on your yard sign.

Q 5: I have a listing which was sold by a buyer broker. The transaction closed yesterday but the seller has possession for 30 days after closing. Today the seller called to tell me that the buyer broker has put up a sold sign and that the buyer had given him permission to put up the sign. In this situation is it the buyer or the seller who’s approval must be obtained to place a sign on the property?

A: Absent a specific agreement regarding this issue between the buyer and seller, it would be the buyer, the current title holder who controls the signage on a property.

Q 6: When advertising a property, can handicap accessibility features, such as a wheelchair ramp be advertised?

A: Yes. For fair housing purposes, you want your ad to describe the property you are marketing not the buyers or tenants you are looking for. If a property has a wheelchair ramp or any accessibility feature the fair housing laws do not prohibit including this feature in your ads for the property.

Q 7: What words are prohibited under Fair Housing Laws?

A: Any word can be discriminatory depending upon context and usage. Words descriptive of race, color, sex, religion, creed, national origin, familial status or disability should never be used. Words suggestive of an intent to unlawfully exclude any person or group should be avoided. It is always best to err on the side of caution; “close calls” should be handled by brokerage management, in consultation with legal counsel.

Q 8: I am a sole proprietorship and my brokerage license is issued in the name “Smith Realty.” I will be canceling my brokerage license next month. I own several rental properties which I run as Smith Realty. Can I continue to use the name Smith Realty on my rental properties after I cancel my broker’s license?

A: Yes. A business does not have to be a real estate brokerage to use the tern “realty.”

Q 9: If my agent is selling or leasing her own property, does she have to include the brokerage name in the advertisement?

A: The name of the brokerage should only be included in the ad if the property is listed with the agent’s broker. If it is not being offered through the brokerage, only the agent’s name should appear. In that case the agent must be sure to identify herself as a licensed agent. An example of proper identification would be “Mary Jones, owner/real estate agent.”

Q 10: Does the brokerage firm name have to appear in advertisements along with the salesperson’s name?

A: Yes. Ohio Revised Code Section 4735.16 provides that the brokerage firm name must appear in all advertisements.

Q 11: I am a sole proprietor, but I would like to do business in a name other than my personal name. Is there a way I can do this?

A: Yes. You may apply to the Ohio Division of Real Estate for permission to do business under a trade name or “dba” (“doing business as”). If approved, that would be the sole identifying name to be used by you in all advertisements. Such a trade name should also be registered as a fictitious name with the Ohio Secretary of State’s office.

Q 12: My brokerage is licensed as a corporation and my corporate name includes the abbreviation “Inc.”. Does this have to appear in my ads since it is part of my licensed name? Do I have to apply for a “dba” if I want to drop it in my ads?

A: Ohio Administrative Rule 1301: 5-1-02 provides that words or abbreviations appearing on a broker’s license to indicate the legal framework under which he conducts business, such as “Inc.” or “Co.” are not required to appear in advertising. Therefore, it is not necessary to obtain a “dba” to drop the “Inc.” in your ads.

Q 13: I am licensed as a sole proprietor. Can I add the words Realty, REALTOR or Real Estate to my name without applying for a “dba”?

A: Yes. Ohio Administrative Rule 1301: 5-1-02 clearly provides that these terms, although not a part of your name as it appears on your license, can be used by brokers in advertising without applying for a trade name. Therefore, if your name is John Doe, you can advertise as either John Doe Realty, John Doe, REALTOR or John Doe Real Estate.

Q 14: Can a salesperson’s name be larger than the broker’s name in print advertisements?

A: No. Ohio Revised Code Section 4735.16(B) provides that the broker’s name must be displayed in equal prominence with the name of the salesperson in such advertisements. Therefore, the agent’s name should not be larger or more prominent than the broker’s.

Q 15: I am currently licensed as a salesperson, but I have a broker’s license on deposit. Can I put “Broker” on my business cards?

A: No. Because you are not actually licensed as a broker you may not put this on your business card. You may put “broker on deposit” if you wish, as that is an accurate statement.

Q 16: Does my brokerage name have to appear on promotional brochures, newsletters, etc. that my agent distributes marketing him/ herself?

A: Yes. Ohio Revised Code Section 4735.16 (B) requires that the name of the broker with whom an agent is licensed must appear in any advertisement of the agent.

Q 17: Can the salesperson put the broker’s name on the back cover of a personal brochure but put their own name and picture on the front?

A: No. The Division of Real Estate does not consider this to constitute displaying the broker’s name in equal prominence with that of the agent.

Q 18: I recall there being some sort of rule about “double dipping” when advertising your sales volume. (i.e. claims to have $3 million in sales in 2017). What is this rule?

A: This refers to an opinion from the Ohio Real Estate Commission issued in the mid 1980’s. According to this opinion, when advertising one’s sales volume, you cannot count the sales price of an in-house transaction twice. Thus, if you listed and sold a $100,000 home, you could only claim $100,000 when figuring your sales volume. This rule does allow you to claim $100,000 in sales when you are the listing broker/agent on a co-op transaction; it also allows the selling brokerage to claim $100,000 in a co-op transaction listed by another firm.

Q 19: Does the “double dipping” rule apply to private sales awards programs of the Ohio Association, my local board of REALTORS, my brokerage or a franchise?

A: No. It only applies to advertisements quoting a dollar volume (i.e. $500,000 sold in first quarter of 1995) not to private awards.

Q 20: When I advertise that I have received a sales award from my Local Board or OAR, do I have to indicate the year(s) in which I received the award?

A: The rules governing OAR’s President Sales Club require that you must indicate the year or range of years in which this award was achieved. Your Local Board of REALTORS should be contacted regarding any rules it has governing the advertisement of the awards they bestow. However, even absent such a requirement by your Local Board, the general provisions in the license law against misleading advertisements would probably be interpreted to require that you indicate the year(s).

Q 21: I want to run an ad that compares the sales volume of my brokerage to those of other brokerages in the area. Are there any restrictions on this type of advertising?

A: Both the license law and the Code of Ethics contain sections that prohibit false or misleading advertisements. Therefore, the first and most obvious requirement for this type of ad is that it must be accurate. This means that if challenged by your competitors (as it most likely will be), you must be able to substantiate your claims or figures.

Secondly, if you are basing your comparative advertising in whole or in part on information provided by your Local Board of REALTORS or an MLS to which you belong, the MLS rules probably require that you indicate in the ad the period of time over which your claims are based. These rules most likely also require you to include in your ad a statement similar to the following: “Based on the information from the Board/ Association of REALTORS (or MLS) for the period (date) through (date).” Therefore, you should check the rules of the MLS to which you belong if you are utilizing “sold” comparable or statistical reports or the MLS of Board’s as the basis for the claims made in your ad. Finally, if you are utilizing actual sales volume figures, the Ohio Real Estate Commission’s rule on double dipping must be followed.

Q 22: I am a broker and have just listed a home that my wife owns. Am I required to put “owner” on my yard sign since I will have to sign the deed to release my dower rights?

A: No. As you are not the title holder your yard sign should not include “owner.” However, you are required to disclose your interest in the property to the purchaser.

Q 23: Can I advertise property listed with another brokerage?

A: Yes. License law provides that to advertise property not listed with your brokerage that you have the written consent of the owner or the owner’s authorized agent and that the advertisement includes the listing broker’s name.

Q 24: Can I advertise FSBO property?

A: To advertise FSBO property you would need the owner’s written consent to the advertising and include in the ad that it is FSBO or unlisted.

Q 25: I want to send out a newsletter to the area I “farm” that includes a list of properties that are currently on the market in that neighborhood. I have some of those properties listed, but several are listed with other brokers. Am I required to obtain consent from the other listing brokers for this type of marketing piece?

A: Yes. In order to advertise another broker’s listings you must first obtain written consent from the “owner” or the “owner’s authorized agent.” On property that is exclusively listed with another broker, the listing broker or agent would be considered the owner’s authorized agent. Therefore you would need written consent from the listing broker or agent to include their listings in your newsletter. Moreover, if consent is given, you must also inlcude the listing broker’s name in the newsletter.

Q 26: Can the consent be obtained from the listing agent, or does it have to come from the agent’s broker?

A: The rule states that you must have the consent of the owner or his “authorized agent.” That could be either the listing broker or the listing agent.

Q 27: Does the rule specify the manner in which I must display the name of the listing broker?

A: Yes. You must use a type size that is the same as, or larger than, the type size used to describe the property.

Q 28: Could I go around the listing broker and agent and get consent from the owner directly?

A: While license law would not prohibit this, the REALTOR Code of Ethics provides that REALTORS cannot take any action that is inconsistent with the exclusive agency relationship another REALTOR has with his/her client. Standard of Practice 16-13 further clarifies that “all dealings” concerning a property that is exclusively listed must be carried on with the client’s agent or broker. Therefore, your ethical obligations as a REALTOR would preclude you from contacting the owner rather than the listing agent or broker.

Q 29: If my buyer requests that I send him a list of the 4-bedroom properties available in the area, do I have to include the listing broker’s name on the properties my brokerage does not have listed?

A: No. Providing the requested information to your buyer would not be considered advertising. Ohio Administrative Rule 1301:5-1-02 (I) provides that the term advertising does not include a private communication between a licensee and a client, customer or prospective client provided the communication is initiated at the request of the client, customer or prospective client.

Q 30: Must a brokerage’s telephone number appear on all signs and ads?

A: While the license law does require a broker’s name to appear in any ad, including yard signs, it does not require that their phone number be included. Therefore, a salesperson’s direct line or home phone could be the only telephone number that appears if the broker chooses to allow this. Licensees should be cautioned, however, that their home could be viewed as a branch office–and thus need to be licensed–if calls are exclusively directed there.