Thursday, May 8, 2008

Avoiding the Fear of Fliers

Real estate fliers can put the dream of homeownership in the grasp of potential buyers, but they can also put you and your agent in front of a civil court judge.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - Well-crafted real estate fliers literally put the dream of homeownership in the grasp of potential buyers.

But if those handouts fly in the face of reality, they can bring a deal to a screeching halt -- in the courtroom.

As a marketing tool, fliers are typically standard letter-sized sheets of paper -- it's best if it's glossy stock -- containing information about a listing. They generally have a photo or image of the home for sale and relevant, descriptive information about the property.

They typically are available during an open house and from a flier holder affixed to a for sale sign. They can be worth a lot more than the paper they are printed on or they can cost you plenty, says risk industry attorney Steven Spile with the Encino, CA-based offices of Spile, Siegal, Leff & Goor, LLP.

During a Risk Management and Consumer Protection Forum for real estate agents hosted by the California Association of Realtors earlier this year, Spile described tips to help make fliers work for, not against, the deal.

The home seller and buyer should also be aware of how to keep the faux out of fliers.

"Remember that everything you say can form the basis for a claim against you. Don't embellish or over state the amenities, features and benefits of your properties. you need to do everything you can do to avoid lawsuits, both for you and for your clients," Spile told the forum.

He also advised:

• Accuracy rules. Don't include information you can't independently verify as accurate. Don't embellish. Instead highlight key features and emphasize the benefits of the property -- "walk-in closets," "view of the lake," "solar panels," for example.

• Avoid absolutes such as "best" and "greatest." Adjectives that aren't absolutes are better, for example "beautiful" or "great."

• Likewise, don't use the word "new" to describe features. "Newer" is better. Also "recently remodeled" rather than "newly remodeled" if you don't have documented evidence of the exact date.

• Don't place monetary values on property features. The value to purchase is generally different than the value to sell. "More than $200,000 in upgrades" may not consider who did the work, the quality of the work, the age of the work and other factors. It's best to describe how much the work cost when completed, what it could cost to have done today, perhaps what value it adds to the house, or how much it could cost to remove or replace it.

• Do not use brand names such as "Jacuzzi" or "Roper" to identify features. Instead use the generic terms such as "hot tub" or "range."

• Don't make representations that compromise a client's negotiating position or impact privacy rights. "Divorce – Sellers are Desperate" and "Pink Slip Bound. Can't Make the Mortgage" are big no-nos.

• When used, square footage references should come with the identity of the source of the information and a disclaimer that states the information is unverified by the seller and his or her agent. How square footage is measured varies from location to location. When used, round square footage numbers to the nearest one hundred square feet.

• Include a general disclaimer such as: "Some or all of the information contained in this flyer is unverified by the seller and his or her agent. Potential buyers should take all steps necessary to satisfy themselves regarding the information contained herein."

• Home sellers should sign off on all flyers and advertisements after they read, understand and approve the information. That's especially true if the property is marketed as a short sale, auction, etc.

• Real estate agents should not be afraid to respond to questions with "I don’t know." Making affirmative misrepresentations is much worse than not knowing. Affirmative misrepresentations can be used as the basis for a fraud claim, Spile warns.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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