True Picture in Use of “Sold” Sign

Article 12, Part 5

The Complaint

REALTOR® A, the listing broker, was charged by REALTOR® B with giving a false picture in his advertising by putting up a “sold” sign on property that had not been sold. REALTOR® A was notiﬁed of the complaint and of the date of a hearing on it scheduled before a Hearing Panel of his Board’s Professional Standards Committee.

The Hearing

Undisputed testimony offered during the hearing revealed that REALTOR® A was an exclusive agent, offering Client C’s home for sale. An offer to buy was obtained from Prospect D and a counter proposal by Client C was accepted. An earnest money deposit was made, and a date for settlement was agreed upon. At that point, REALTOR® A put up his “sold” sign. Several days later, Prospect D received an unexpected notice from his employer that he was to be transferred to another city. Prospect D immediately contacted REALTOR® A and Client C about his predicament. In an amicable discussion it was agreed that everyone had acted in good faith; that the property was readily marketable; that the earnest money deposit would be refunded; and that REALTOR® A would put the property on the market again. A week later, when REALTOR® B was showing a number of houses to a prospective buyer, they drove by Client C’s property, and the prospect casually said that she didn’t understand the “sold” sign, since she had been taken to see the house that morning by REALTOR® A.

REALTOR® B contended that a “sold” sign is a measure of a REALTOR®’S advertising, and that it cannot give a true picture if it is put up prior to the settlement and actual transfer of ownership.

The Conclusion

The Hearing Panel’s decision agreed with REALTOR® B’s contention that the use of a “sold” sign constitutes advertising by a REALTOR® but did not agree that a “sold” sign could be put up only after the actual settlement and transfer of ownership. The decision indicated that after the client’s acceptance of a bona ﬁde offer, REALTOR® A could consider that he had brought about a sale and would not be in violation of the requirement to give a “true picture” by putting up a “sold” sign. However, once it was clear that the sale had fallen through, the “sold” sign should have been immediately removed since allowing the sign to remain in place no longer provided a “true picture.”

REALTOR® A was found by the panel to have violated Article 12.