With the market heating up, agents scrambling to find inventory, and new technology emerging every day, agents are continually looking for ways to set themselves apart from the competition. As the real estate team concept has risen to a fevered pitch, the pressure on agents to brand themselves is ongoing, and so are the arguments for and against state laws cracking down on advertising and promotion that highlights the agent rather than the brokerage.
In California, regulators are cracking the whip again and reminding agents again that misleading the customer into believing you are a real estate broker (rather than a real estate agent) is a violation of the law. The terms are not interchangeable just as the licensing requirements for “broker” and “agent” not interchangeable.
The California Bureau of Real Estate (CalBRE), the state’s regulatory agency overseeing real estate practices, issued a license alert this month warning agents (and brokers who are complicit) against misleading consumers that they are brokers. (This current or supplemental alert is the second such alert on this matter…the first alert on this subject was issued in September, 2015.)
This license alert prohibits any real estate agent to “brand” themselves in their advertising, signage, promotional statements, etc. as a “real estate agency” such as Mary Smith Real Estate, “broker,” “brokerage,” and/or “independent” practitioner. Any agent who does risks “… significant fines, license revocations and possible criminal prosecution.”
Wayne Bell, California Real Estate Commissioner, explains. “Salespersons cannot provide – or advertise that they can provide – real estate services independently from their responsible brokers…they must be affiliated with and reasonably supervised by…a responsible broker in order to engage in real estate licensed activities in California. The law provides no exceptions.” (Supervision also includes oversight of an agent’s branding tools such as signage, advertising, etc.)
Additionally, real estate agents cannot brand themselves as “independent” practitioners or as “teams” unless the team “…discloses the name of its responsible broker and includes a surname and license number of at least one member of that team.” Otherwise, it is illegal to use terms such as “team,” “group,” “associate.”
Other states such as Tennessee, Michigan and South Carolina have similar regulations and restrictions regarding the inability of agents to use terms such as “real estate,” “realty,” etc. and the requirement of agents to state the firm name and phone number of the agent’s specific brokerage in all signage.
Some agents take offense at these regulations. One agent in Jackson, Michigan, Tim Creech, believes that such restrictions are discriminatory by putting more emphasis on brokers and less emphasis on agents. “All agents are 1099 self employed. Creating a brand image is critical in building a personal business identification. The law is unfair and serves no purpose other than creating larger companies controlling business and hurting small businesses.”