Chapter 8 Advertising

Regulations of the Real Estate Commissioner have the same force and intent of the law. Explain the Advertising License Designation and Disclosure of License Identification number on Solicitation Materials under Article 9 Sections 2770.1 and 22773

Article 9 - Section 2770.1 - Advertising Licensee Designation using terms such as Broker, Agent, Realtor and abbreviations is deemed sufficient identification to fulfill the designation requirements of BP 10140.6. Article 9 - Section 22773 - Disclosure of License Identification on Solicitation Materials says that all First point-of-contact solicitation material must disclose the licensees eight-digit real estate license number. This includes business cards, stationary, website flyers etc.

What is the AIDA approach?

As part of an ad, it is read to attract buyers and designed to grab the reader's Attention, stimulate his or her Interest, generate a Desire and lead the reader to Action.

Describe what Attention means in an ad?

Attention is the first step in any type of advertising is to gain the reader's attention.

What is the reason television advertising is not used too often?

Basically Television Advertising is very expensive and is used sparingly for general real estate advertising. It is most often used by large real estate general advertising.

What are blind ads?

Blind ads do not identify the advertiser as a broker and are illegal in California.

What are "direct approach" emails?

Direct approach emails can be directed to a specific area code by using zip code lists and can include color pictures, movement and even sound. This unsolicited email must conform under CAN-SPAM regulations by having a valid header and a opt-out clause (link) at the bottom of the email.

Where are display advertisements usually used?

Display advertisements are primarily used for selling developments rather than single family homes.

What is display advertisements?

Display advertising is used to primarily build goodwill and prestige and keep the name before the public.

Why do fixer upper ads get a greater response?

Fixer Upper ads garner a greater response because property with problems spells opportunity to a great many buyers. You must obtain the owner's permission in writing before doing the advertising.

If creditors extend credit secured by a dwelling more than five times per year, what must they furnish the purchase?

If creditors extend credit secured by a dwelling more than 5 times per year, they must furnish the purchaser a truth in lending disclosure showing all loan facts.

What are Rescission Rights?

If the loan is for consumer credit, secured by the borrower's residence the borrower has the right to reconsider and cancel.

What should newspaper advertising include?

Newspaper advertising should include a broker name, phone number, and internet address.

Must a licensee include their license number in contact material, newspapers and periodical advertising?

No, a licensees license number is exempt as are for sale signs and television ads.

Are the Code of Ethics of the National Association of Realtors legally enforceable by law?

No, although not legally enforceable by law, it is a moral code and it's guidelines are observed by most real estate licensees in California. Professional courtesy and ethics should not end with those acts that have been sanctioned by law.

Under Regulation Z, does the total finance charge for the term of the loan have to be disclosed

No, under Regulation Z, the total amount of finance charges for the term of the loan need not be shown for first mortgages or loans used to purchase real property.

When is outdoor advertising generally used?

Outdoor advertising is generally used for large new developments because of their cost which can be several dollars per month.

What is "Pay-Per-Click" ads?

Pay-per-click ads work in that every time a click on an ad is made you pay a small fee.

Why do people buy real estate?

People buy real estate for the benefits offered such as a relaxing life style, a feeling of security or love of family. Some people buy based upon how others will react.

What is personal advertising?

Personal advertising should start with a name tag identifying you as a real estate professional and should be readable from at least six feet and if you are a realtor, it should say REALTOR.

What is Specific or Operational Advertising?

Specific or Operational Advertising is concerned with immediate results. A broker's advertisements are in direct competition with the advertisements of other brokers.

What does the Civil Rights Act of 1968 prohibit?

The Civil Rights Act of 196 prohibits discriminatory advertising that limits any preference, limitation or discrimination based on race, color, religion, sex, handicap, familiar status or national origin.

What are QR codes?

The QR codes are called Quick Response codes where a smartphone can scan and capture a business card with this code. This code can contain business card data as well as access to website, resumes etc.

What is the Truth in Lending Act

The Truth in Lending Act or Regulation Z is part of the Federal Consume Credit Protection Act of 1968 requires disclosure of credit costs as a percentage as well as total finance charges. It is enforced by the Federal Trade Commission.

How does the ad create Desire in an ad?

The ad can create desire by appealing to the senses and emotions of the buyer. Language must be clear and concise and inspire the reader's confidence.

Describe what Interest means in an ad?

The ad should arouse interest in the specific product or service offered.

What Action should the ad create?

The ad should move potential buyers to take action to make a purchase.. This would entail a phone call, email or fax to your office and asking for information.

What information should your business card include?

The business card should include your photograph, email address, fax number, real estate license, broker affiliation.

How many business days does a person regarding Rescission Rights have?

A borrower has up to midnight on the third business day following loan completion and applies to home equity loans and home refinancing. Rescission rights do not apply to home purchase loans.

What should be disclosed on solicitation materials for the first point of contact with consumers

The licensees identification number should be included on solicitation materials intended to be the first contact with consumer and includes business cards, stationery, websites owned, controlled and or maintained by the solicitating licensee, promotional and advertising fliers, brochures, email and regular mail, leaflets and any other marketing or promotional materials designed to solicit the creation of a professional relationship. The type size of the licensee identification number should be no smaller than the smallest size type used in the solicitation material.

What is the most common form of real estate ad?

The most common form of real estate ad is still classified advertising.

What is the most common and most important reason for advertising?

The most important reason for advertising is to find ready, willing and able buyers for sale listings.

What is the objective of media advertising?

The objective of media advertising is to reach the greatest number of potential prospects with the least possible cost.

What is the one drawback of newspaper advertising?

The one drawback of newspaper advertising is that it's effective life span is short.

What three elements must be included in advertisements regarding Truth in Lending?

The three elements that must be included in advertising are: 1) Amount or percentage of down payment 2) Terms of Repayment 3) Annual Percentage Rate (APR) the true interest rate considering points and other loan costs, and the nominal rate stated on the note.

In determining what media to use what are the two considerations that need to be discussed?

The two considerations that need to be discussed are: 1) What are my marketing goals? 2) What specific media will reach my target audience?

What are the two major types of advertising?

The two major types are Institutional and specific or operational advertising.

What types of loans are exempt from Regulation Z?

The types of loans exempt from Regulation Z are: 1) Business Loans 2) Agriculture Loans 3) Construction Loans 4) Personal Property Loans over $25,000 5) Interest Free Loans with 4 or fewer installments. 6) Non-owner occupied housing is considered a business and exempt. 7) Carryback financing for most sellers (not more than five times per year) are also exempt.

True/False - Under Truth and Lending, Bait and Switch advertising is a Federal Offense.

True, Bait and Switch under Truth and Lending is a Federal Offense.

When does Truth in Lending apply?

Truth in Lending appli8es when credit is extended with a finance charge or credit payable in more than four installments.

Under Section 10131.7, Mobile Home Advertising, what are licensees prohibited from doing?

Under Section 10131.7, a licensee is prohibited from doing the following: 1) Advertising a mobile home that is not an established mobile home park or is being sold with the land. 2) Failing to withdraw an advertisement of a mobile home within 48 hours of removing from the market 3) Advertising or represent a used mobile home as a new one 4) Making a false statement that a mobile home is capable of traveling on California Highways 5) Falsely advertising that non down payment is required on the sale of a mobile home when in fact one is required.

Under Section 10139, what are the penalties for an unlicensed person?

Under Section 10139 a person may be subject to a fine not to exceed $20,000 an/or imprisonment in the county jail for a term not to exceed six months.

Under Section 10139, what are the penalties for an unlicensed person if it is a corporation?

Under Section 10139 the penalty for an unlicensed person is $60,000.

Under Section 10140, what is the penalty for employee who advertise a false statement concerning land or a subdivision?

Under Section 10140, you can be subject to a fine of $1,000 and/or one year's imprisonment and the licensee may have his license suspended or revoked

Under Section 10140.5, Disclosure of Name, what is the penalty?

Under Section 10140.5, a licensee that offers to assist in filing applications for the purchase or lease must indicate the name of the broker and the state in which he is licensed.

Under Section 10140.6, what does it say regarding False Advertising?

Under Section 10140.6, a licensee may not publish in a newspaper or periodical an ad for any activity that a real estate license is required that does not contain a designation disclosure that they are performing acts for which a license is required.

Section 10235 - Misleading Advertisements talk about what?

Under Section 10235, A licensee may not advertise false or misleading statements regarding rates, terms, or conditions for making, purchasing or negotiating loans or real property sales contracts nor may a licensee permit other to do so.

Under Section 10236.1 - Inducements, what is a licensee prohibited in doing?

Under Section 10236.1, Inducements, a licensee may not advertise to offer a prospective purchaser, borrower or lender any gift as an inducement for making a loan or purchasing a promissory note secured directly by a lien on real property or a real property sales contract.

What should you keep in mind with using radio advertising?

When using radio advertising, match the property with the demographics of those who listen to the station.

What features should you include in your website?

You should include the following on your website 1) Tell a little about you and the company 2) Provide photos and descriptions of the listings 3) Show the location of the properties on an Area Map 4) Have the offer of e-mail so that you can send the client updates 5) Have Motion/and or sound features on your ads 6) Have a link for Loan Qualifications for the viewer 7) Provide an 800 number to encourage calls from outside clients 8) Have a link on each page to go back to the home (first page). 9) Include a "Contact Us" section to allow the viewer to email you 10) Have a link to MLS to list other open listings available on the agents website.

How often should you post on Social Media regarding recent success on sales?

You should post at least when you have a successful transaction

You may advertise on Social Networking sites. What are the names of some of these sites?

Some of the Social Networking sites include Twitter, Facebook and Instagram and LinkedIn. You can also post videos on YouTube.

What are the five basic tenets of advertising?

1) Advertise the right property 2) Know when to advertise 3) Choose the right market 4) Use the proper media 5) Use effective advertising techniques

There are many media choices. Name a few.

1) Personal advertising 2) Internet property sites 3) Social Media 4) General circulation newspapers 5) Homebuyers magazines 6) Direct Mail 7) Newsletters

Under the Code of Ethics, what should Realtors do with regards to Advertising under Article 12

1) Realtors should be honest and truth in their real estate communications and shall present a true picture in their advertising, marketing and other representations. They should ensure that this information is apparent in their advertising, marketing and other representations. 2 )12-4 Realtors shall not offer for sale/lease or advertise any property without authority. 3) 12-5 Realtors shall not advertise nor permit any person employed or affiliated with them to advertise without disclosing the name of the Realtors firm in a reasonable and readily apparent manner. 4) 12-6 Realtors when advertising unlisted real property for sale/lease in which they have an ownership interest shall disclose their status as both owners/landlords and Realtors or real estate licensees.

In determining the media choice the advertiser must begin with three basic consideration. What are these considerations?

1) What is the target audience 2) What is the message to be conveyed 3 How much is available for spending

What should a magnetic sign contain?

A magnetic sign should contain your name, the name of the firm, REALTOR, firm logo. The magnetic sign should say "OPEN HOUSE".

What is Advertising?

Advertising is the process of calling people's attention to something to arouse a desire to buy or obtain more information about the product or service being promoted.

HUD tried to in January 9, 1995 to clarify prohibitions under the Civil Right Act of 1968 in terms of whether certain words would be discriminatory. Can you list some examples that were allowable to be used?r

In January 1995, certain words were allowable with regards to the Civil Right Act of 1968 with regards to the following: 1) Under Race, Color and National Origin, the use of Master bedroom, rare fined, or desirable neighborhoods were allowable. 2) Under Religion, it was allowable to say "apartment complex with chapel or "kosher meals available. 3) Under Sex, the term master bedroom, mother in law suite and bachelor apartment were allowable. 4) Under Handicap, great view, fourth floor walkup and walk in closet did not violate the act. 5) Under Familial status, use of 2-BR, cozy family room, services and facilities with no bicycles terminology was allowable.

What is Institutional Advertising?

Institutional Advertising attempts to create a favorable image of the real estate company, the broker and the salesperson

What bodies regulate real property advertising?

Real Estate Advertising is regulated by California Real Estate Law, the regulations of the real estate commissioner and the Federal Consumer Credit Protection Act (Truth in Lending Act.)

When should "For Sale" signs be used and what characteristics should they have?

Real Estate signs are relatively inexpensive as they work seven days a week/24 hours a day. They should be unique with an identifiable logo and design with eye catching print. The best color contrast is yellow and black.