FACTS: A brokerage has its office in the designated broker’s personal residence.  The brokerage has a separate entrance and a sign displayed at the front door. 

The designated broker allowed his agent to place an open house sign in the front yard.  When a woman entered the “open house,” she asked if the house was for sale.  The agent told her the house was not for sale, but that he could offer her a list of homes for sale in the area.

ISSUE: Can a brokerage located in a personal residence place open house signs in the yard if the house is not for sale?

ANSWER: No.

DISCUSSION:         

Commissioner’s Rule R4-28-502(C) states: A salesperson or broker shall ensure that all advertising contains accurate claims and representations, and fully states factual material relating to the information advertised. A salesperson or broker shall not misrepresent the facts or create misleading impressions. 

The “open house” sign is misleading as the public may think the broker’s house is for sale.  The better business practice would be for the agent to use signs that say “area information available here” or something of that nature.