Advertising in Real Estate: Overview & Laws

Instructor: Kyle Aken

Kyle is a journalist and marketer that has taught writing to a number of different children and adults after graduating from college with a degree in Journalism. He has a passion for not just the written word, but for finding the universal truths of the world.

Advertisers in real estate must comply with specific rules and regulations. This lesson describes how the Mortgage Acts and Practices Advertising Rule ensures honesty in advertising and helps to avoid deliberate deception among real estate actors.

Methods of Advertising in Real Estate

Internet advertising is one of the most profitable methods for advertising real estate property. The top website for real estate buying and selling is Zillow.com. There are other online methods that can be utilized, however. These can include Facebook, YouTube, Google AdWords, or even your own website. But don't forget the traditional methods of advertising in existence before the internet came along. People still choose to utilize other methods, such as newspapers, broker events, and even referrals.

Real Estate Advertising Legislation

The Federal Trade Commission (FTC) oversees legislation implemented to ensure honesty and prevent deception in real estate advertising. They require compliance with the Mortgage Acts and Practices Advertising Rule, which was enacted by the Consumer Financial Protection Bureau (CFPB). This regulation 'prohibits certain material representations in any commercial communication about any term of a mortgage credit product' ('Mortgage Acts…,' n.d.).

The term mortgage credit product refers to 'any form of credit that is secured by real property or a dwelling that is offered or extended to a consumer primarily for personal, family, or household purposes' ('Mortgage Acts…, n.d.). The legislation listed above applies to all methods of advertising in real estate and is information that all agents, brokers, and licensees should know well.

Online Advertising in Real Estate

When utilizing online advertising, there are many rules and regulations that firms and licensees must follow. A licensee is an individual who is authorized by the state to act as an agent and is legally able to represent buyers and sellers in real estate transactions. The key legal requirements in advertising that every broker and licensee should know are shown below.

Advertising Real Property on Websites

If a licensed firm or individual licensee has authorized advertising of real property online, the website or webpage must include the following:

  • The location of the listed or advertised property - This must be the city in which the property is located.
  • The name of the firm or licensee - This must be the name that is registered with a real estate regulatory body, board, or commission. It can also be the 'doing business as' (dba) name of the firm as long as it is appropriately registered in that state with the regulatory agency.
  • The jurisdiction where the firm holds a real estate brokerage license - This is used in the case that the firm does not hold licensure in the location of the property for sale.
  • In the case of an individual licensee, the affiliated firm of the licensee - As with any registered firm, this must be registered with a real estate regulatory commission, board, or body. The dba name is allowable in this scenario as well, so long as it is registered locally in the state of operation.

Advertising Real Estate Brokerage Services on Websites

If a licensed firm or individual licensee is advertising brokerage services online, the website or webpage must include the following:

  • The name of the firm or individual licensee - This must be the name that is registered with a real estate regulatory body, board, or commission. It can also be the 'doing business as' (dba) name of the firm as long as it is appropriately registered in that state with the regulatory agency.
  • The location of the firm or licensee's office - This must include both the city and state where the firm's or licensee's office is registered and located.
  • Regulatory jurisdictions - This must be the jurisdictions where the firm has a real estate brokerage license.
  • In the case of an individual licensee, the affiliated firm of the licensee - Just like a firm must use their registered name in this type of advertising, so must an individual licensee. As with real property, it may be the dba name as long as this name is locally registered within the state of operation.

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