BROKER RISK MANAGEMENT
Weekly Practice Tip
Social media can be an excellent strategic marketing tool for real estate agents. However, it can also be dangerous if it is not handled properly and with consideration of potential risks. Please consider the following scenarios:
SCENARIO NO. 1: Real estate agent posts pictures of homes on his Facebook page. The homes are not his listings, and he did not obtain permission from the owners or listing agents to utilize these photographs. The listing agent and seller together filed a complaint with the local Association of REALTORS®. The local Association professional standards panel found against the agent and fined the agent $1,000.00 for unauthorized use of photographs on his Facebook page.
SCENARIO NO. 2: Agent takes a video during a broker’s open house and posts it on social media with commentary pointing out negative aspects of the property. The seller, who is an attorney, sues the agent for negligence as well as a number of other causes of action. Agent settles the case for a significant amount of money.
SCENARIO NO. 3: Agent posts criticisms of a property’s sales price on her Facebook page. The agent states that in her opinion, the property is overpriced. The property goes into escrow. The buyers’ best friends see the post on Facebook and tell the buyers. The buyers are so embarrassed that the buyers cancel the contract. The sellers sue the agent for negligence, as well as other claims.
SCENARIO NO. 4: Agent posts criticisms of an officer of a competitive company and makes disparaging remarks regarding him. That competitive company retains counsel who writes a cease and desist letter to the agent and the broker regarding that behavior. The agent is not only reprimanded by his broker but is ostracized by the local real estate community.
SCANARIO NO. 5: Agent posts advertising on agent’s Facebook page. Agent fails to identify agent’s broker or license number. Agent receives a notice from the Department of Real Estate (“DRE”) advising to correct agent’s website. Agent then receives a $250 cite and fine for violation of DRE Regulations.
SCENARIO NO. 6: Agent has two Facebook pages, one personal page and one for professional posts. On his professional Facebook page, he posts extreme political positions and advocates against the existing federal government. Agent begins receiving threats and losses business. Agent’s broker receives threats of violence and lost clients.
As indicated in the above-described scenarios, agents need to be cautious in utilizing social media. While social media can be a tremendous tool and asset for marketing themselves and listed properties, agents need to be cautious in their social media posts.
PRACTICE TIPS:
- If an agent is using social media to promote themselves or property, they need to include the name of their broker and their license number.
- Agents should not utilize or market other agents’ listings without written permission from the listing broker.
- Agents should not promote off-market properties without the seller’s written permission.
- Agents should not use their professional social media sites to advocate their political or religious views.
- Agents should not use social media to negatively disparage properties, other agents, or companies. In addition to creating potential legal liability, doing so is also a violation of the Code of Ethics.
This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.