Legal FAQs for REALTORS®
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How do I include the required information in social media advertising when there is a character limit? (Updated Jan. 16, 2014)

If the required information would consume more than 10% of the available character limit, the real estate licensee may include a direct hyperlink containing the words “TREC DISCLOSURE” which links to the required information. Note: Where it is not possible to create a hyperlink on the words "TREC DISCLOSURE" (such as on Twitter), you may include the words "TREC DISCLOSURE" followed by a link to the required information. 

The Code of Ethics also requires that REALTORS® disclose the name of the REALTORS®’s firm in a reasonable and readily apparent manner. However, if disclosing the name of the firm in an electronic display of limited information is not practical when advertising using social media, the advertisement may link to the required disclosures.


If I advertise my services using social media, am I still required to comply with advertising rules and regulations? (Updated Jan. 16, 2014)

Yes. Remember that an advertisement is any written or oral statement or communication which induces or attempts to induce a member of the public to use the services of the real estate licensee. Therefore, if you are advertising your services using social media, you must still comply with the advertising rules and regulations, such as including a designation to clearly identify the licensee, including the name of your broker (in a clear and conspicuous manner), and avoiding deceptive or misleading advertising.


I am a salesperson. Can I advertise under my broker’s assumed name that includes my name? (updated Jan. 17, 2014)

Yes, if you also include in the advertisement either your broker’s name or another assumed name of your broker that does not include a salesperson’s name. Otherwise, the advertisement would imply that the salesperson is the person responsible for the operation of a real estate business.


Is it a fair-housing violation for a real estate ad to include “City Park is within walking distance” or “Easy walk to neighborhood schools”? Does this language discriminate against handicapped people? (Updated Oct. 10, 2014)

No. Advertisements with this language would not appear to be violations of fair-housing laws. HUD has indicated that ads containing descriptions of properties (e.g., "fourth-floor walk-up" or "walk-in closets"), services or facilities ("jogging trails"), or neighborhoods ("walk to bus stop") do not violate the Fair Housing Act.

See the Advertising category for more advertising-related Legal FAQs. 


Can I advertise or recommend the use of services from certain service providers such as inspectors, moving companies, or repair contractors on my website? (Updated Oct. 2, 2015)

Yes. However, if you advertise the use of a service provider and expect to receive compensation from that service provider when someone uses his services, your ad must disclose that arrangement. Keep in mind that acceptance of certain fees from service providers may violate RESPA or other laws, so consult with an attorney about any fees you receive.  


Must the license identification information be on each page of my Web Site? (updated Jan. 1, 2002)

Generally, yes.


If I do not identify any individual associate in an advertisement but only name the firm, must the license identification information be included? (updated Jan. 1, 2002)

If the name of the firm (regardless of the type of entity) does not readily identify the firm as a real estate brokerage firm, there must be an additional designation that identifies the firm as a real estate brokerage firm. For example, Available, Wil Anderson and Company, 512-522-2222 does not comply but, Available, Wil Anderson and Company, REALTORS®, 512-522-2222 complies.


As a REALTOR®, I'm entitled to use the term REALTOR® in my ads, but I understand there are certain requirements on how the term may appear. Can you elaborate? (updated Jan. 1, 2002)

Only members of the REALTOR® association may use the term REALTOR®. REALTOR® members may use the term REALTOR® only in connection with their real estate business. One may use the term REALTOR® only descriptively. One may not use the term REALTOR® as part of one’s name, but may use that term to describe the firm. The term REALTOR® should always appear in capital letters and the federal registration symbol, ®, should follow. Punctuation should be used to separate the firm name from the term REALTOR®. Do not hyphenate or abbreviate the term REALTOR®. Do not use descriptive words to modify the term REALTOR® (for example, Professional REALTORS®, Commercial REALTORS®, etc.).


I’m the listing agent for a property that has received little interest from buyers. Can I advertise that I will rebate part of my commission to a buyer to help attract offers? (Updated Jan. 21, 2015)

Yes. The ad must disclose that the rebate is subject to the seller’s consent since the rebate is to a party you do not represent. Also, if the rebate is contingent upon certain restrictions, such as the use of a particular service provider, the ad must contain a disclosure that payment of the rebate is subject to restrictions.


If a name of a firm includes terms such as "real estate" or "management," is that sufficient to identify the firm as a real estate brokerage firm? (updated July 24, 2013)

No. Generally, those terms are not sufficient.


How can I determine if my online ads generally comply with the rules and regulations? (Updated Oct. 6, 2014)

The following checklist of questions can help. While this list may not be comprehensive, it sets out many compliance issues.

1. Does the ad contain any misleading statements, or does it tend to create a misleading impression in any manner? It is prudent for someone who did not design the ad to scrutinize it for any potentially misleading statements. Keep in mind that the standard is not whether a statement is true, but whether the advertisement "tends to create a misleading impression."

2. Does the ad contain the name of the real estate firm or broker? It should.

3. Does the ad identify the professional or license status of people in the ad? It might be prudent to identify the license status of all individuals and firms named in the ad, either specifically or globally. Use of the term REALTOR® is acceptable to identify this status.

4. Does the person causing the ad to be published have proper authority to publish or submit the advertisement?

5. Is the price quoted the price agreed upon by the owner?

6. If any service is offered “free of charge,” make sure that the service is not tied to or contingent upon any service for which the REALTOR® is to be compensated.

7. If any inducements are offered, does the ad fully describe the conditions for inducements?

8. Is any ownership interest in the property held by the REALTOR® disclosed?

9. If any loan information is advertised, does the ad comply with requirements of Regulation Z?

10. Does the ad inadvertently imply a limitation or preference to a protected class that could potentially violate fair housing laws?

11. Is the specific information related in the advertisement accurate?


May I use the term REALTOR® in the name of my firm? (updated Jan. 1, 2002)

No. A REALTOR® may use the term REALTOR® only descriptively. The term REALTOR® may not be used a part of firm’s name, but may be used to describe that the firm is a REALTOR® firm. For example, Alamo REALTORS®, Inc. is not a proper use of the term, but Alamo Real Estate, Inc., REALTORS® is a proper use of the term. In the second example, the term REALTORS® is not part of the name and is used descriptively, as evidenced by the comma and the placement of the term Inc.


Is my Web site an advertisement? (updated Jan. 1, 2002)

Generally, yes. The Internet is a medium in which merchants, professionals, vendors, etc. place notices and information designed to call the matter to public attention. Most "commercial" Web Sites are designed to solicit and attract business.


Along those same lines, would the following designations in advertisements be sufficient? (updated July 24, 2013)

Yes: For Sale, Branigan Real Estate Brokerage Firm, 555-5555
Yes: For Sale, John Elder and Company, REALTORS®, 772-2828
Yes: For Sale, Cahill Realty, 523-2323

No: For Sale, Rio Bravo Real Estate, 444-4343
No: For Sale, Rio Lobo Management, 222-2727
No: For Sale, Guns Donavon and Company, 667-6677


I am preparing a farming letter to solicit listings in a subdivision. What are the rules regarding advertising to a neighborhood in which properties are already listed for sale by another agent? (updated March 7, 2014)

Standard of Practice 16-2 clarifies that the Article 16 prohibition against engaging in any practice inconsistent with the agency relationship of another REALTOR® is not intended to prohibit general announcements to prospective clients, even though some of those announcements reach other REALTORS®’ clients. General announcements include advertisements addressed to all possible prospects in a given geographical area.

What is prohibited by Article 16 are solicitations not part of a general mailing but directed toward owners identified through current listings, signs, or other sources of information required by Article 3 or MLS rules.

While there is no ethical rule requiring that farming letters that otherwise satisfy the requirements of Standard of Practice 16-2 include a disclaimer, many REALTORS® do include some form of disclaimer to make it clear to owners and their listing brokers that their general solicitation of listings was not intended to solicit the current listings of another REALTOR®.


May I use the term REALTOR® in my domain name? (updated Jan. 1, 2002)

NAR’s Legal Affairs Department answered this question as follows: "The term REALTOR®, whether used on the Internet, as part of the domain name, or in any other advertisement, must refer to a member or member’s company, may not be used with descriptive words or phrases, and should be separated from the member’s name or company’s name. Uses such as number1REALTOR®.com, firstREALTOR®.org, or REALTOR®properties.com are all incorrect. Uses such as johndoe-REALTOR®.com or abcrealty-realtors.com on the other hand are examples of what could be done with the term as part of a domain name."


My Web site is designed in such a way that persons accessing the site can communicate and transact business with my firm directly from the Web site. Is my site still considered an ad? (updated Jan. 1, 2002)

Generally, yes. It is the electronic transmission or e-mail that is the communication vehicle through which the business is conducted. The information on the Web site is an advertisement.


If the ad identifies the firm as a real estate brokerage firm and names individual associates in the advertisement as well, must I designate each associate as a salesperson or broker? (updated Jan. 1, 2002)

It is prudent to identify each and every person named in the advertisement as a salesperson or broker to avoid confusion, but is not required as long as the person or firm causing the ad to be published is identified in the ad as a real estate broker or salesperson.


Is it a fair-housing violation for a real estate ad to include “City Park is within walking distance” or “Easy walk to neighborhood schools”? Does this language discriminate against handicapped people? (Updated Oct. 10, 2014)

No. Advertisements with this language would not appear to be violations of fair-housing laws. HUD has indicated that ads containing descriptions of properties (e.g., "fourth-floor walk-up" or "walk-in closets"), services or facilities ("jogging trails"), or neighborhoods ("walk to bus stop") do not violate the Fair Housing Act.

See the Fair Housing category for more fair housing-related Legal FAQs. 


Texas' new telemarketing law went into effect last week and created a statewide no-call list. Are REALTORS® required to obtain the no-call list when making cold calls? (April 3, 2002)

The telemarketing bill (HB 472) does not apply to a call made by a real estate licensee if the following conditions are met: 1. The call can not be made by an automated telephone-dialing system. 2. The solicited transaction can not be completed until a face-to-face sales presentation by the licensee occurs, and the consumer is not required to pay or authorize payment until after the presentation. 3. The consumer has not informed the licensee that the consumer does not wish to receive calls from the licensee.


Must the name of my firm be included in a newspaper ad or on my Web site? What about my broker's name? (updated Jan. 7, 2010)

NAR's Code of Ethics requires that the name of the firm be included in advertisements of listed properties and on a REALTOR®'s Web site. It is prudent to include the name of the firm in all ads. Furthermore, TREC rules prohibit an advertisement that in any way implies that a salesperson is the person responsible for the operation of a real estate brokerage. The broker's name should also be included in any advertisement, including a REALTOR®'s Web site, to avoid violating this rule.


May I have a global disclosure at the top or bottom of each page that says all persons and firms named in this advertisement are licensed brokers or salespersons? (updated Jan. 1, 2002)

Yes, assuming all individuals named in the advertisement are licensed. Be careful not to include the names of any unlicensed persons in such an advertisement.


Can I call a FSBO seller who is on the National Do-Not-Call Registry if I have a client who is interested in the property? (Updated Oct. 21, 2014)

Yes. Since the call is not a solicitation, you may contact a seller marketing a for sale by owner property about your client’s potential interest—even if the seller’s number is on the National Do-Not-Call Registry. As a buyer’s representative, you may only discuss your client’s interest in the property, and you cannot use a purported client’s interest as a way to solicit the listing.

A real estate professional is prohibited from initiating a telephone call to a FSBO whose number is listed in the National Do-Not-Call Registry in an attempt to obtain the listing or to solicit other business. The rules prohibit anyone from making telephone solicitations to numbers registered in the database, and a call initiated to obtain the listing constitutes an impermissible solicitation.


Can you briefly outline the requirements I must comply with if I put any loan information, such as the monthly payment or interest rate, in an ad? (updated Jan. 1, 2002)

If the ad contains loan information, those terms must be available to a qualified borrower. If a rate of finance charge is set out (interest, points, loan fees), then the words "annual percentage rate (APR)" must be used. The advertisement must state the APR and whether the finance charge can increase over the term of the loan. If the advertisement contains information about the down payment, term, payment amount, or finance charge, then all of the following information must be disclosed: down payment, term, APR, and whether the rate may be increased. Mentioning only the APR will not trigger the additional disclosures. If specific information other than the APR is mentioned, such as the loan amount, down payment, etc., then the disclosures are triggered.


May I use abbreviations to identify a person as a licensee? (updated Jan. 1, 2002)

Yes, if the general public commonly knows the meaning of the abbreviation. For example, brkr. or agt. are probably sufficient.


Can I call a FSBO seller who is on the National Do-Not-Call Registry if I have a client who is interested in the property? (Updated Oct. 21, 2014)

Yes. Since the call is not a solicitation, you may contact a seller marketing a for sale by owner property about your client’s potential interest—even if the seller’s number is on the National Do-Not-Call Registry. As a buyer’s representative, you may only discuss your client’s interest in the property, and you cannot use a purported client’s interest as a way to solicit the listing.

A real estate professional is prohibited from initiating a telephone call to a FSBO whose number is listed in the National Do-Not-Call Registry in an attempt to obtain the listing or to solicit other business. The rules prohibit anyone from making telephone solicitations to numbers registered in the database, and a call initiated to obtain the listing constitutes an impermissible solicitation.


What are the rules about how quickly I must remove a listing from a website once it has sold? (updated March 10, 2014)

The Real Estate License Act and NAR’s Code of Ethics prohibit any misleading or false advertisements. If a real estate licensee advertises listings on the Internet and fails to remove the listings within a reasonable period of time after the listing sells, the licensee could be accused of misrepresenting the status of available property in his advertisement. A real estate licensee might be accused of misleading the public to believe that the licensee has an inflated number of listings. Therefore, advertisements on the Internet that concern listed properties should be promptly removed after the listing sells.


Do the same rules that require the license-identification information to be included in an advertisement and require the name of the broker or firm to be an advertisement apply to classified ads as well? (updated Jan. 1, 2002)

Yes.


One of our firm’s listings has a contract pending. The listing agent wants to leave the property’s status in the MLS as “active” because he believes that some agents won’t show the property for backup offers if it’s listed as “pending.” Is it an MLS rule violation to leave it listed as “active”? (Updated June 25, 2014)

Most MLS rules require that participants accurately report the status of listings and promptly report changes to that status in the MLS. It’s likely that the listing agent would be violating the MLS rules by not reporting the correct status. 


How do I identify myself as a real estate broker or salesperson in my advertisements? (updated June 25, 2014)

The Real Estate License Act requires licensees to identify themselves as a real estate broker or salesperson in any ad the licensee publishes. Using the term REALTOR® by REALTOR® members is sufficient to identify yourself as a broker or salesperson.

The following is an example of unacceptable ad copy:

2-bedroom apartment available
Jacob McCandles and Company
Call Rooster Cogburn: 512-555-2222

The following are examples of acceptable ad copy:

2-bedroom apartment available
Jacob McCandles and Company, Real Estate Brokers
Call Rooster Cogburn, salesperson: 512-555-2222

2-bedroom apartment available
Jacob McCandles and Company, REALTORS® 
Call Jacob McCandles, broker: 512-555-2222


Do these same rules apply to commercial real estate brokers and salespeople as well? (updated Jan. 1, 2002)

Yes.


How can I determine if my Facebook posts are considered real estate advertising? (Updated July 11, 2014)

The Texas Real Estate Commission does not specifically address advertising on Facebook. However, Facebook posts may fall under TREC’s advertising rules, which say an advertisement is a statement or communication that induces or attempts to induce a member of the public to use the services of the real estate licensee.

Despite the lack of guidelines, certain posts are more likely to be construed as advertisements than others. For example, a Facebook post that contains a listing with the text “I sold this home in five days. Contact me at 555-1212 to list your home” seems to meet the criteria set for by TREC’s definition of advertising. However, the rules are less clear regarding a post commenting on the statewide housing market.  


If my Facebook posts are considered advertising, what should I do to comply with real estate-advertising requirements? (Updated July 11, 2014)

TREC requires you to include your broker’s name in a clear and conspicuous manner and a designation that clearly identifies you as a real estate agent, such as agent, broker, or REALTOR®, in your advertisements. You should also avoid deceptive or misleading advertising. 

Neither TREC rules nor TREC’s enforcement division specify where you should put the required information on Facebook—just that it must be in the ad.

To avoid any violations of Article 12 of the Code of Ethics, REALTORS® shall be honest and truthful and present a true picture in their advertising and ensure that their status as real estate professionals is readily apparent in their advertising. 


I’m sending a farming letter to a neighborhood where I’ve sold a home. Can I include the MLS sale price information of properties in the neighborhood in my letter? (updated Aug. 6, 2014)

The answer will depend on your MLS Rules, specifically Section 13 of the Model MLS Rules, which is a mandatory rule.

Your MLS can adopt either of two options in Section 13. One option allows an MLS participant to use sale price information from the MLS in advertising. The second option has limitations, and does not allow an MLS participant the right to include information about specific properties listed or sold by other participants.

Both options require the advertisement to include the time period for the information and where it was obtained from using the following format:

Based on information from the (local) association of REALTORS®/from the (local) MLS for the period (date) through (date).

Be sure to check with your local MLS to find out what your MLS Rules entail. Texas is a non-disclosure state, but that only means that sale price isn't public record. Your MLS dictates how sale-price data is used. 


My client was named the executor of his mother’s estate after she passed away, and now he’s planning to sell the house she owned. He hasn’t lived in the property, so he has no idea if there are any existing issues. Is he still required to furnish a Seller’s Disclosure Notice to potential buyers? (Updated Jan. 15, 2016)

No. Certain types of sellers, like an administrator or executor of an estate, are not required to provide a seller’s disclosure notice to prospective buyers. The seller should check the box in Paragraph 7B(3) to show that the Seller’s Disclosure Notice is not required. This situation is one of the 11 exemptions found in the Texas Property Code statute regulating seller’s disclosure notices. Click here to see the code, and scroll down to Section 5.008(e), which lists the exemptions.  Remember that even though this type of seller is not required to provide a disclosure notice, he must still disclose any known material defects. 


My buyer client is on day four of his 10-day termination-option period. I sent a copy of his inspection report to the listing agent along with an amendment for repairs, but the listing agent told us that his client refuses to open the report or negotiate for any repairs. What can my buyer do? (Updated Nov. 12, 2014)

If the buyer is not satisfied with the information in the inspection report or cannot get the seller to agree to requested repairs, the buyer can exercise his right to terminate the contract before his option period ends.

A broker or seller who receives an inspection report is charged with knowledge of the information in the report even if the broker or seller does not open the report. While sellers and listing agents should review inspection reports they receive on the property, a buyer or buyer’s representative can't force them to review the reports. There is also no requirement that sellers agree to or even consider amendments requiring the seller to perform repairs to the property.


Can my unlicensed assistant call potential buyers and sellers and make an appointment for a licensed agent to talk to the prospect? (Updated Jan. 30, 2015)

No. This is often referred to as telemarketing, and only a licensed real estate broker or salesperson may make such calls. Both the Real Estate License Act and TREC rules make it clear that all solicitation work must be conducted by licensees.


A title company has offered to reimburse me for the cost of the snacks I want to provide at my next open house. Can I accept? (updated April 1, 2015)

A title company could reimburse you for the cost of the snacks you provide at an open house if someone from the title company attends it to make a presentation or otherwise market services, since then the title company isn’t conditioning the snacks on receiving referrals. A title company providing snacks for your open house without offering normal promotional or educational activities could be seen as providing something of value to you for business referrals, which would be a violation of Section 8 of the Real Estate Settlement Procedures Act (RESPA).


The Farm and Ranch Contract has two sections related to fees: a Ratification of Fee and an Agreement for Payment of Brokers’ Fees. When should each be used? (Updated Dec. 4, 2015)

A listing broker who has already agreed to pay a commission to a cooperating broker—in the MLS, for example—should fill out the Ratification of Fee box. As in other TREC contracts, this simply authorizes the escrow agent to pay the cooperating broker from the listing broker’s fee at closing.

The seller and buyer should not sign the Agreement for Payment of Brokers’ Fees if the listing broker has already agreed to pay the cooperating broker’s commission elsewhere—this could bind the seller or buyer to pay additional amounts to the listing broker or the cooperating broker they didn’t intend.  The revised Farm and Ranch Contract, which takes effect January 1, 2016, now includes this instruction at the bottom of Page 9.

However, a seller and buyer could sign the Agreement for Payment of Brokers’ Fees if the listing broker hasn’t offered to pay a commission, like if the property wasn’t listed in the MLS. Note that the agreement states either the seller or the buyer will pay the brokers.


Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.

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