Harmless exaggeration or violation?

Can a home without indoor plumbing be advertised as modern?

This case study from the National Association of REALTORS® Ethics and Arbitration Manual concerns Article 12 of the Code of Ethics, which states: "REALTORS® shall be careful at all times to present a true picture in their advertising and representations to the public. REALTORS® shall also ensure that their professional status (e.g., broker, appraiser, property manager, etc.) or status as REALTORS® is clearly identifiable in any such advertising. (Amended 1/93)"

Prospect A noted REALTOR® B’s classified advertisement describing a home with five acres "about 20 miles from the city" giving directions to the "modern three-bedroom home, well maintained, and set in a charmingly landscaped site."

After visiting the property, Prospect A clipped out the ad and pasted it to a letter to the board of REALTORS® complaining of the gross exaggeration it contained, which had induced him to waste time and money in inspecting the property. The property, he said, was actually 36 miles from the city limits. It lacked indoor plumbing of any kind. Its wood-lath support for plaster, which was visible in many large breaks in the walls, indicated it to be 40 years old or more. There was no evidence of painting in recent years. Several windows were broken; half of the back steps were missing. The house was located at the end of a crude dirt road in a small cleared area that had become densely overgrown in weeds–a picture of extreme neglect.

REALTOR® B was asked to respond to the charge of misleading advertising, and a hearing was called on the complaint by the Professional Standards Committee. REALTOR® B criticized the complainant for bringing the matter to the board, pointing out that Prospect A had failed to mention that the property was priced at only $16,500; that, at such a price, it was an exceptionally good buy to anyone looking for a small place with a few acres; that, to get attention to such properties, it was necessary to do a bit of "puffing" to attract attention in advertising; that, as a matter of fact, the general lines of the house were similar to many of modern design; that the house had been well enough maintained to be salvageable by anyone who would do a reasonable amount of work on it; and that, in his opinion, the site was truly "charming" in its rugged simplicity.

How do you think the hearing panel ruled?

Ruling: The hearing panel concluded that REALTOR® B had used gross exaggeration in his advertisement and was found in violation of Article 12 of the Code of Ethics.

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