Do you know when a real estate listing over-sells certain features on a property? Like perhaps it says it has a "period charm," when in fact, the unit is really just outdated. This phenomenon in real estate is called puffing, and yes, it is legal.
While misrepresentation of fact is illegal, puffing, on the other hand, falls under an opinion. Just because you think the unit is outdated doesn't necessarily mean that the agent or owner doesn't think it is dripping with period charm. Puffing falls into a grey area in which a real estate agent can't really be sued for misrepresentation or fraud.
But that doesn't mean that agents don't need to be careful. Of course, real estate agents must represent their clients and their assets to the best of their ability – which often includes puffing as a sale strategy – but they must also be truthful.
Let’s go over an example of puffing that could get an agent in trouble.
Sarah is a new real estate agent who just landed her first big listing agreement. Unfortunately, the seller's property isn't in the best area, with high crime and a train line just a block away. So while she is putting together her listing, instead of being truthful about the area's crime rates, she lies and uses the description of a "safe, quiet area with great schools."
While it is a buyer’s responsibility to do their own research on a property and area, by including this information in the listing that directly contradicts the facts of the area, Sarah is making herself vulnerable to a lawsuit.
As a new real estate agent, it is important that you understand how to sell a home's best features without exaggerating to the point of lying. Developing this skill set can take time and experience, but no matter what, always ensure that your listings are truthful.
If you want to see some examples of questions that will be on the actual real estate exam, check out our free real estate practice exam. We have been named as the best real estate exam practice for 7 years in a row!
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