By Kay Wilson-Bolton
February 13, 2007
Some say that REALTORS® have as many rules as ruffles have ridges. If that is true there are many good reasons; two primary ones are to protect the public and to keep our conduct at the levels of excellence.
A common marketing practice among real estate agents and REALTORS® is the claim to have “sold” a property in order to attract new sellers and new buyers to their real estate expertise.
This topic is being covered so that the real estate community and the public know there are guidelines in making these claims and that a misrepresentation is a violation of our Code of Ethics.
Under the National Association of REALTORS® Code of Ethics, both agents are allowed to advertise that they have “sold” the property.
Our Standard of Practice 12-7 reads as follows: “Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have “sold” the property. Prior to closing, a cooperating broker may post a “sold” sign only with the consent of the listing broker.”
It is clear that only those REALTORS® who participated in a transaction may advertise or represent that they “sold” the property once escrow has closed.
However, Standard of Practice 12-7, as written, does not place a timing restriction on when a REALTOR® may advertise or represent that they “sold” the property. Therefore, a problematic question arises on whether REALTORS® may use the term “sold” after a purchase contract has been signed and during the escrow period prior to closing.
Article 12 requires REALTORS® to present a “true picture” in their advertising and representations to the public. Many local areas consider a property “sold” after escrow closes on the property.
Other areas consider a property “sold” after the purchase contract has been signed. Some MLS’s even have several reporting categories (i.e. pending, pending/no contingencies, sold, etc.), which may influence how the term is used in advertisements in the area.
Therefore, depending on local practice and usage of the term, it is possible that a REALTOR® may not be presenting a “true picture” by advertising or representing to the public that he or she “sold” the property prior to the close of escrow.
In any case, determining whether an advertisement or representation using the term “sold” presents a “true picture” is ultimately done by a tribunal from the local Board’s/Association’s Professional Standards Committee.
If you, as a buyer or a seller, are influenced by the sales activity of a potential REALTOR® whom you may choose to represent you, be sure that your decision is based on facts, not just representation.
As always, if you have questions, contact an attorney with real estate experience, interview at least two REALTORS®, or call the Ventura County Coastal Association of REALTORS®. There is an experienced group of REALTORS® ready and able to answer your questions.
Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com