An agent has a listing for a property. One day while searching the real estate advertisements posted on craigslist (a popular Web site featuring classified advertisements), the agent discovers the following posting for her listing: A Stunning 2 Bedroom, 2.5 Bathroom Townhouse. Best Price in Cedar Lakes. Located on Sutler Hill Court. Call Jesse at 207-3214 to Schedule a Showing. The listing agent is curious and calls the number. She discovers in talking with Jesse that he is another agent who placed the advertisement on craigslist in order to attract potential buyers. Is this ethical?
This question poses so many potential violations of the Code of Ethics and state licensing regulations that it is difficult to know where to start! Standard of Practice 12-4 of the Code of Ethics states REALTORS® shall not offer for sale/lease or advertise property without authority. That authority can only come from the seller or the listing agent. Since it was the listing agent who called Jesse about the craigslist posting, we can assume that she did not give this other agent permission to advertise her listing. If Jesse did not receive the sellers permission to advertise the property on craigslist then this may be a breach of his ethical obligations. The Virginia Real Estate Board (VREB) Rules and Regulations also contain a similar requirement. These regulations prohibit a licensee from advertising a specific, identifiable property if she does not have the written consent of the seller (18 VAC 135-20-190 D 4).
If Jesse did receive permission from the seller then that would raise a separate question about how he was able to do so without interfering in the listing agents relationship with the seller. Standard of Practice 16-13 states that all dealings regarding a property listed with an agent must be conducted through that agent unless the agent or broker has given the other agent permission to contact the seller directly or the seller has initiated the conversation. It is possible that the seller contacted both the listing agent and Jesse to advertise this listing. It is also possible that the listing agents broker (without the agents knowledge) gave Jesse permission to contact the seller about advertising a property on craigslist. Neither of these situations seems likely.
Some have defended this practice by arguing that it does not harm the sellers interest to provide additional advertising exposure. This argument misses the point, however. The seller has a right to control who can advertise the property for sale. There are a number of reasons why a seller may not wish to allow someone who does not represent her interest to be advertising the property. Therefore, we can not assume the seller would consent to another agent advertising the property for sale. The rules outlined above recognize the sellers right to authorize other agents to advertise the property and allow for that possibility.
The problems with this listing do not end with Jesses unauthorized advertising. This advertisement also does not disclose the fact that the person who posted it on craigslist is a real estate licensee. Realtors® are required under Article 12 of the Code of Ethics to ensure that their professional status is clearly identifiable in any advertisement. In Virginia, this may be done by using any job title that indicates the person is a licensee. Examples would include, but are not limited to the following: salesperson, broker, agent, associate broker, Realtor® (including use of the Realtor® Logo), broker-owner, sales associate, etc. The advertisement also does not indicate what firm the agent who posted the advertisement is affiliated with. Standard of Practice 12-5 requires that a Realtor® must disclose the name of her firm when advertising a property for sale.
This is one area in which the state licensing regulations go further then the Code of Ethics. The VREB Rules and Regulations state that a licensee is required to disclose specific information in online advertisements. For notices posted on bulletin boards such as craigslist, the following four pieces of information must appear at the beginning or end of the message.
1. The licensees full name (as it appears on the license). A Doing Business As (DBA) name may be substituted for the name on the license if it has been properly registered with VREB.
2. The name of the firm with which the licensee is affiliated.
3. The city and state where the licensees offices are located; and
4. The jurisdiction where the person holds a license. This includes all jurisdictions where his or her license is held, not just the state in which the property is located.
The disclosure rules can vary depending on the whether the advertisement is on a Web page, email message, banner ad, etc. Agents and brokers are advised to carefully review section 18 VAC 135-20-190 C 2 (a-f) of the VREB Rules and Regulations in order to familiarize themselves with the conditions that trigger the requirements identified above.
Finally, the wording of the advertisement in this case may also lead a potential buyer to believe that it was placed by an unrepresented seller rather than a real estate licensee. A real estate agent who implies in an advertisement that the seller is a FSBO may be in violation of the state licensing regulations (18 VAC 135-20-190 D 1).