Real estate advertising is a key part of finding leads and meeting potential clients. However, REALTORS must also honor real estate advertising law in Illinois and the REALTOR® Code of Ethics. Violating these rules can have severe consequences for your reputation, cash flow, and career. Real estate brokers must ensure that their advertising practices comply with these laws to avoid legal issues and potential loss of reputation. In this article, we’ll explore the dos of real estate advertising that brokers should follow.
Table of Contents
The Eleven Do’s of Real Estate Advertising Laws
Truth and Accuracy in the Listing and the Contract
- Be honest
Be honest and truthful in all advertising to avoid deceiving potential clients. Advertising must not contain any false or misleading statements that can lie about the property or services offered. The worst thing that could happen isn’t an disciplinary action against you, the Realtor – it’s a lawsuit against the client about disclosures!
- Present a true picture of the home you’re listing
Brokers must ensure that the information they provide to potential clients is an accurate representation of the property being advertised. All images and videos must show the actual state of the property without any editing that misrepresents the home’s true condition. That true condition extends to the legal condition of the home too, like if it’s in foreclosure or in a quiet title.
- Ensure your status as a real estate professional is readily apparent
Real estate brokers must make it clear that they are a licensed real estate professional. Just add “licensed real estate broker” or “licensed real estate agent” to your advertising. It’s that easy. Real estate advertising law requires you to do this or you’ll be in hot water! This does not just apply to brokers, but to anyone who might be acting like one too.
Truth and Accuracy in Compensation
- Disclose any benefit from a third party under RESPA
Real Estate Settlement Procedures Act (RESPA) requires brokers to tell the client about any benefit they receive from a third party, such as a mortgage broker or title company. This must be done in a clear and conspicuous manner. This office has personally sued multiple mortgage companies for failing to abide by real estate advertising laws on referrals. Heck, the Illinois DS-1 litigation last year was one of the biggest issues in the whole field!
- Offer thorough, advance understanding of all terms and conditions of any offering of premiums, prizes, merchandise discounts, etc. as a reason to list, sell, purchase, or lease property
If brokers offer incentives such as discounts or prizes to attract clients, they must provide a good explanation of all the terms and conditions to avoid any misunderstandings. This extends to closing gifts as well! In Illinois it is not lawful for a REALTOR to run a promotion where:
- The promotional item or service is not available.
- The promotional item or service isn’t restocked after the REALTOR runs out.
- The promotional item or service is available only in a limited number or for a limited time, and that is not told to the client.
- The REALTOR talks down the promotional item or service to try and get the customer to buy a better one.
- The REALTOR provides an incentive to not sell the advertised product or service.
- The REALTOR will not process orders for the promoted item or service.
- The REALTOR will not fulfill orders for the promotional item in a reasonable time frame.
- The REALTOR charges any fees to redeem the promotional item or service offered.
Be Clear About the Firm You Work For!
- Disclose the name of your real estate firm in a reasonable and readily apparent manner
Brokers must disclose the name of their real estate firm in a clear and prominent manner. Just add your firm’s name to the content. In states other than Illinois and markets other than Chicago, it can be unethical to put the Agent’s name in bigger font than the firm. Contact your local board to see how to comply with this regulation.
- Disclose your status as an owner or landlord
If a broker is advertising a property that they own or rent, they must tell this information to potential clients. In the City of Chicago, you ought to tell the housing client that you own an LLC or Corporation that rents the property on your behalf. We’ve seen three suits on this in the past year since this article’s publication.
- Ensure the information on your website is current and include the firm’s name and state(s) of licensure in a reasonable and readily apparent manner
The information on a broker’s website must be accurate and current. They must also disclose the name of their firm and state(s) of licensure in a prominent manner. It is further wise to include HUD’s equal housing statement of non-discrimination, a disability policy, a privacy policy and some terms and conditions for the use of the website. Due to the issues of the civil rights era, real estate advertising laws are particularly strict on this point!
Real Estate Advertising Laws on Your Status with the Brokerage
- Disclose if you will share, sell or remarket any information from the Internet
If brokers gather information from potential clients through their website, they must disclose if the information will be shared or sold to third parties. You can’t profit from clicks without telling your clients.
- Display only your legitimate professional designations, certifications, and credentials
Brokers must only display professional designations, certifications, and other credentials that they are legitimately entitled to. Falsely claiming credentials is a violation of state law and the REALTOR® Code of Ethics. It’s also a really crummy and scammy kind of behavior to engage in!
- Disclose your status as the managing broker, if applicable
If a broker is advertising on behalf of a real estate firm, they must disclose their status as the managing broker if they hold that position. Be proud of your professional success and acclaim it!
In conclusion, real estate brokers in Illinois must follow specific advertising regulations and adhere to the REALTOR® Code of Ethics to avoid legal issues and maintain their reputation. Brokers must be honest and truthful in their advertising, present a true picture of the property, and disclose any relevant information to potential clients. By following these advertising dos, brokers can attract potential clients while complying with the law and upholding ethical standards.
Ten Don’ts of Real Estate Advertising Law in Illinois
Violating state law or the REALTOR® Code of Ethics can lead to serious consequences, so it’s essential to stay informed about the do’s and don’ts of real estate advertising. We want long healthy relationships with our REALTORs, so let’s work together to create a healthy and sustainable Chicago market.
Here are some things to avoid when advertising properties in Illinois:
Real Estate Advertising Problems You Already Know About
- Don’t be misleading or untruthful.
It’s critical to be truthful in your advertising. Illinois law prohibits false or misleading statements, such as misrepresenting the price of a property or its features. Always double-check your facts before you advertise a property and make sure to accurately represent the property and its attributes. Simply putting “buyer to verify all information” isn’t good enough.
- Don’t post blind ads.
A blind ad is an advertisement that conceals the identity of the real estate broker or agent. In Illinois, it is illegal to post blind ads because they can be misleading to potential buyers or sellers. Always disclose your identity as a real estate professional in your advertising.
Problems that Arise From Bad Paperwork
- Don’t advertise property without authority.
Illinois law requires that real estate professionals have written authority from the property owner before advertising a property. Advertising property without written authority from the owner can result in disciplinary action against your real estate license. It can also result in lawsuits for conversion, slander of title, and is just generally a really scummy thing to do. Don’t do it!
- Make sure all quoted prices are the agreed prices.
It’s essential to quote the price of a property accurately with the seller’s agreement. Any deviation from the agreed price can be considered deceptive and misleading, which can lead to a violation of Illinois real estate advertising laws. Make sure that you’re renting the property at the amount they’re willing to accept. It is your responsibility to put the correct price on the MLS.
Marketing Techniques that Realtors Don’t Know Are Illegal Real Estate Advertising
- Don’t engage in unauthorized framing of real estate brokerage websites.
Framing is a technique used to present content from one website within another website. Illinois law prohibits real estate brokers from using deceptive or unauthorized framing of other brokers’ websites. It’s important to use only authorized and ethical methods when presenting content from other brokerage websites. We see this in our practice regularly when someone has a data scraper API that grabs real estate listings from one brokerage’s site and presents them as the agent’s own listing. Don’t do that. You’ll lose your license.
- Don’t manipulate listings and other content in any way that produces a deceptive or misleading result.
Real estate brokers are prohibited from manipulating listings or other content in a way that produces deceptive or misleading results. You cannot put beautiful pictures of another property as links to your fixer-uppers. You can put lipstick on the pig, but you absolutely can’t tell people it’s vegan. Any alteration of a property’s features or value must be factual and accurately represent the property.
Real Estate Advertising Problems That Come From Bad Web Practices
- Don’t deceptively use metatags, keywords, or other devices/methods to direct, drive or divert Internet traffic.
Metatags and keywords are essential components of SEO and can help drive traffic to your website. However, using them deceptively can be a violation of Illinois advertising laws. Always use metatags and keywords honestly and ethically. Don’t put #dreamhome on a 1 bedroom fixer-upper. Don’t put #investorspecial on a 4 million dollar mansion. This is common sense but doing this wrong will cause you problems.
- Don’t present content developed by others without either attribution or permission.
It’s important to give proper credit when using content developed by others. I cited every article that helped with this one. You should always get permission before using content created by someone else, and give proper attribution when required. Stealing is wrong.
Real Estate Advertising Lies of Omission
- Don’t use or register URLs or domain names that present less than a true picture.
Your URLs and domain names should accurately represent your business and the services you offer. Don’t use misleading or confusing domain names that misrepresent your business or services. We call ourselves The Chicagoland Lawyer because we are lawyers in Chicagoland. You couldn’t use that website name if you were a deli counter in Peoria. If you want to call your business “The Lisle Investor Guru” then you better be around Lisle, Illinois.
- Don’t represent a service as free or available at no cost unless you will receive no compensation from any source for that service.
Be upfront about any compensation you receive for your services. If you are offering a free service, make sure it is truly free, and you receive no compensation from any source for that service. Misrepresenting your services can result in disciplinary action against your real estate license. An example of this is how we disclose our title fees here. I always mention to the clients that I get a percentage of title fees, and that’s why I charge no attorneys fees. You can’t let the client think you’re not getting paid. Make sure to be truthful about your money. Honesty is always a better real estate advertising virtue than stinginess.
Fair Housing Real Estate Advertising Laws
So, let’s talk about the fair housing marketing practices that are required for real estate advertising law in Illinois. The purpose of these practices is to make sure that everyone has equal opportunity and access to housing. This means that the marketing efforts of a real estate professional must aim to ensure that everyone has knowledge of and an opportunity to rent units in a particular building, regardless of their race, color, or national origin.
It’s important to note that some marketing practices may not reach potential applicants fairly across the market area. For example, relying on word-of-mouth marketing without other efforts designed to reach a broader pool of buyers or tenants can disadvantage those folks who are not connected to the family or social networks of the people who live there. The same effect can happen when you target too restrictively. Placing “for rent” signs at a property, in the absence of other, broader advertising, won’t reach applicants who do not live near, visit, or pass by the property, and may contribute to patterns of residential segregation. The entire point of Illinois real estate advertising laws is accuracy in the marketplace and preventing segregation.
The Broader Your Marketing, the Better Chance You’ll Be Compliant to Fair Housing
In contrast, marketing strategies that employ a variety of community contacts, media, and social media, covering a broad area are more likely to fairly reach residents and avoid racism in housing. For example, housing providers may distribute detailed flyers and blank applications to local organizations across the market area with ties to a wide range of prospective applicants, such as social service providers (e.g., foodbanks, legal-aid offices, emergency shelters, health clinics), employers, advocacy organizations, and other agencies, local governmental offices, housing authorities, and community gathering places (e.g., senior centers, recreation centers, libraries, schools, and places of worship).
Moreover, keeping up a website with clear information about availability, eligibility, and application processes can be a low-cost way to inform eligible people about housing at the property – especially those who have a hard time calling or visiting during business hours. Posting on social media, local pages, and other sites that people near you use to find housing (including registries of affordable housing maintained by local governments, housing authorities, or community organizations) can be equally effective in reaching additional applicants. Placing ads with local radio stations, newspapers, and magazines, as well as posting ads in public places, such as buses, trains, and billboards can help reach a lot of people. Just follow the above rules.
Real Estate Advertising Laws must appeal to people beyond English Speakers
It is also important to mention that real estate advertisers must take reasonable steps when marketing to ensure meaningful access for individuals with limited English proficiency (LEP). A real estate advertiser’s failure to provide meaningful access to LEP individuals can be a form of national origin discrimination that violates Title VI. When you make your ads, the presence of LEP persons among the people in the market area should be on your mind, and appropriate language assistance services resources, including translated materials, should be developed accordingly.
Finally, all marketing materials should be written and designed in a manner that conveys that all applicants are welcome regardless of their race, color, or national origin. Marketing materials should describe property amenities, eligibility criteria, approximate rent, procedures for obtaining and submitting applications, and an explanation of how tenants will be selected (i.e., by lottery according to preferences). Visual content that affirmatively conveys that the property is actively seeking a diverse applicant pool should also be used.
Conclusions
Overall, real estate advertising law requires housing providers to check at how well their ads are reaching a diverse group of people. Housing providers can do this easier by tracking how applicants heard about the property and making decisions on that data. While every marketing strategy may not be necessary for multifamily developments with a small number of units, it is important that each property employs marketing strategies that are responsive to existing racial or other demographic concentrations in the property
In conclusion, violating Illinois real estate advertising laws can result in disciplinary action against your real estate license. As a licensed real estate broker, it’s essential to stay informed about the do’s and don’ts of real estate advertising law. By following these guidelines, you can ensure that your advertising is ethical, legal, and effective.
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