Social Media and Real Estate

Social Media and Real Estate

By Steve Bochenek, IAR Chief Legal Counsel

Social media has had an ever increasing impact upon the real estate brokerage business. One can easily anticipate that this same trend will continue into the future. We see social media used in communications between licensees and their clients or customers. Social media is used by brokerage companies for advertising purposes and for communication with its sponsored licensees. Consumers are using social media to discuss properties that they may have for sale or lease. Social media is often an effective means of communicating and advertising. However, it brings with it the need to understand the interplay of social media with the Real Estate License Act (“Act”), the REALTOR® Code of Ethics (“COE”) and company policy.

There are a number of different platforms for communicating through social media. Some of these would be communicating through Facebook, Twitter, Pinterest or by blogging. The issues are similar no matter the particular platform of social media used for communication. Perhaps most importantly, you need to communicate with your client as to your and their use of social media.

Discussions with your client should begin at or prior to the time when you actually have a formal engagement with the seller to list or market their property or with a buyer to seek an appropriate property for the buyer. A discussion ought to include how you generally intend to use social media in terms of marketing or locating a property, communications with a client by social media and whether the client or potential client has any issues or concerns with your intended use of social media. Ultimately, you would like to have some type of written acknowledgement, whether in your listing or exclusive marketing agreement, in an e-mail or in some other document indicating that the client that you will be working with acknowledges that you will be using social media as a means of marketing a property or seeking a property for them and that the client has no concerns or gives permission for the use of social media in that regard. Your company policy may provide how and where the company would like this acknowledgement to occur. For example, if you are going to market a property through a social media platform, there ought to be a general consent documented. The last thing you want is for a client to see their property marketed through Facebook or some other social media platform only to be surprised by that means of marketing and to contact you wanting to terminate the marketing agreement.

Another reason to obtain consent from clients is in connection with privacy issues. One question may be whether the client wants a picture of their home used or displayed on a social media platform. If you intend to include a picture of a client in connection with the marketing of property or to announce a new listing or a closing on a listing you would also need the consent of the client. There should be some type of written documentation, whether in a formal agreement with the client or otherwise that you can document that you have permission to use photos of individuals or properties on a social media platform.

Another reason to discuss communications by social media with your client or prospective client is to familiarize them with some of the potential pitfalls of their communicating about a property through a social media platform.

For example, you might discuss with the seller the pitfalls of posting a communication on a social media platform that indicates that an offer has been received that they are willing to accept when the seller is still involved in the negotiating process. The visibility of communications on a social media platform can result in the prospective buyer seeing that communication and as a result refusing to negotiate with regards to the purchase price of the property. The key for a prospective seller is not to disclose confidential information on a social media platform. Sometimes this is obvious, such as an amount that the seller is willing to accept, and sometimes this type of communication is not as obvious. For example, a posting concerning a family matter such as a health issue or employment change may be worthwhile information to share with friends via social media platform but it also may provide information to prospective buyers that would give them a potential advantage in negotiations regarding the property.

Likewise, prospective buyers need to be cautious as to their postings on a social media platform. This would be particularly true as to indicating amounts they are willing to offer in connection with the purchase of a property or an indication that they have made an offer but are going to buy the property even though the negotiations are still in process. Such information in the hands of the seller could well disadvantage a prospective buyer in terms of bargaining regarding the purchase of the property.

The keys in connection with client communications regarding social media is that those discussions occur, that consent of the client is obtained for use of social media platforms for communications about your representation of them or the marketing of the property and that you have some documentation for your files indicating that you have the approval of the client for the use of the social media platform for communications and marketing and the right to use images or photos, if that permission is given.

Another important consideration for the licensee in connection with the use of social media platforms is understanding that the provisions of the Act do apply to communications via social media platforms. For example, the provisions of Section 15-15 of the Act regarding maintaining the confidentiality of confidential information received from a client applies to communications via a social media platform. Such communications could include anything from the fact that a property has been listed, to the employment or financial status of an owner, to a family situation, such as a need for a move or a retirement. This depends upon whether the client has indicated a need to maintain certain information as confidential. The potential for disclosure of confidential information seems to be greater with the social media platform because, for some reason, when making a short communication on a social media platform there seems to be a tendency to pay less attention to the detail of the posting and the potential audience that the communication might reach.

For a brokerage company and its licensees, a key consideration with regards to the use of a social media platform is advertising. The Act contains specific provisions dealing with advertising, particularly in Sections 10-30 and 10-35. Other sections of the Act may well be applicable, such as Section 15-15 dealing with a licensee’s responsibilities to their client. However, the first consideration when posting a communication on the social media platform is whether it constitutes advertising. This is a question that is probably not considered often enough when postings to social media platforms are made.

An example of advertising by posting through a social media platform would be if you are announcing that you have a new listing on a Facebook page or through Twitter. This communication would be marketing either or both of the listing you just received and your real estate brokerage business. Section 10-30(b) of the Act provides that “no blind advertisements may be used by any licensee, in any media, except as provided for in this Section.” 

To the extent this communication is advertising you would need to make sure that it is not a blind advertisement in order to comply with the Act. There may be a variety of ways to ensure that that the advertisement is not a blind advertisement which could be through including your sponsoring broker’s business name along with the posting or by including an indication of your sponsoring broker’s business name being contained in a link that is available in the posting. In addition, if this posting is made by the managing broker of the company then under Section 10-30(g) the managing broker will need to identify themselves as the “managing broker” of the company.

Communications through a social media platform of a more innocent nature might also be considered as advertising. For example, perhaps you are returning from vacation and want some of your customers clients and who are potential clients to be aware that you are back and available for business. You send a message through a social media platform to a number of individuals indicating that you have had a great vacation and you are back and you have a lot of properties that are listed or that you can show interested individuals. You may go on to indicate that it is a great time to buy and encourage people to contact you. This would again be considered as advertising under the Act and subject to the provisions of Section 10-30. This would include the no blind advertisement provision. Also, under Section 10-30(d) the sponsoring broker’s business name would, if the company is a franchise, need to include that franchise affiliation. Also, the same provision indicates that this advertising is under the direct supervision of the sponsoring or managing broker.
Obviously, there are other provisions in the advertising sections of the Act that you also need to be concerned about dealing with advertising. For example there is a provision in Section 10-30(a) that provides “(A)dvertising shall contain all information necessary to communicate the information contained therein to the public in an accurate, direct, and readily comprehensible manner.”  Also, if you are posting to a social media platform regarding a property in which you have an ownership interest you need to make sure that you comply with the advertising provisions dealing with property owned by you or in which you have an ownership interest.

A key concern in connection with the use of social media platforms, including websites, is the question of whether you are gathering consumer information that will either later be sold or shared with others. If that is the case then disclosure of that needs to be made to the consumer. The Act provides in Section 10-35(a) that the disclosure to the consumer must be made “. . . in a timely and readily apparent manner.”  The COE provides in Standard of Practice 12-11 that the disclosure must be made “. . . in a reasonable and readily apparent manner.”

Another consideration in connection with advertising and social media deals with communications regarding properties listed by brokers other than your sponsoring broker. For example, when a listing comes on the market that you think would be of interest to some of your clients or potential clients you may decide to take several pictures of the property to send to clients or potential clients. The two questions that you would need to consider are whether this constitutes advertising and secondly whether you have the required permission to use these images or photos of the property that you have taken as opposed to images that may just appear on a multiple listing service website or another broker’s website. If you refer to Section 1450.715 of the Administrative Rules under the Act there is a provision that states “(D)eceptive and misleading advertising includes, but is not limited to the following: 1) advertising a property that is subject to an exclusive listing agreement with a sponsoring broker other than the licensee’s own without the permission of and identifying that listing broker . . . .”  Thus, to the extent that posting this information on a social media platform constitutes advertising there is a violation of this particular section unless you have obtained the permission of the listing broker. This would be true unless you are simply using information available through a multiple listing service and the permission to use the information posted there comes from the participation in the multiple listing service. The second issue deals with your own photos or images that you have taken of the property for posting on the social media platform. The question here deals with whether or not you have the necessary permission from the owner of the property. The situation may call for you simply to post the communication on a social media website and include a link to the original listing information.

There are no provisions in the Act or its rules dealing specifically with the use of social media. Licensees need to consider whether postings on a social media platform constitute advertising and what advertising rules would apply. Also consideration needs to be given to who might see a posting and whether that presents an issue as regards disclosing confidential information or makes the posting general advertising. Last but certainly not least licensees need to discuss with their clients the use of social media platforms, both by the licensee and the client. 