10.49 Offering Prizes, Inducements, and Free Services (if permitted by your State)

Company policy is to offer prizes, inducement, and services in an ethical and honest way. Each State has different laws and requirements for offering prizes, inducements and free services. Several States nationwide prohibit this practice. Check with the Broker or Manager to ensure compliance with your State laws.

The REALTOR® Code of Ethics permits offering premiums, prizes, merchandise discounts, or other inducements to list, sell, purchase, or lease real property. This is the case even if the receipt of the benefit is contingent upon the listing, selling, purchasing, or leasing of the real property through the REALTOR® making the offer. The code of ethics does not consider these activities unethical. They are viewed as normal sales and marketing tools common in most areas of American commerce. Caution should be taken, however, to be accurate and thoroughly explain the terms of the offer to the public.

For example, a licensee, desiring to represent buyers exclusively, advertises in a real estate publication:

"Why not use a buyer’s agent? As a buyer, it costs you nothing." Obviously, the licensee does not intend to work for free. Rather, the seller will be paying the fee. The licensee must disclose to the buyer how the fee arrangement works.

Licensees may use the term "free" only if all of the terms and conditions relating to the availability of the "free" product or service offered are clearly disclosed. For example, a licensee places an ad that states "Call for a free market analysis on your home.” The ad must also state under what conditions the licensee will provide the "free" market analysis.

The offering of prizes or inducements is not illegal as long as the licensee clearly discloses the terms and conditions of the offer. Offering prizes or inducements are always subject to the limitations or restriction of state law.