October 10, 2022
With the real estate market changing, Realtors are trying our of the box techniques for advertising and marketing. Some are successful and others could put the agent into legal troubles.
As a good listing agent, Realtors should advertise closing cost that the seller will pay for and not advertise a buydown of the interest rate.
Realtors should be careful offering specifics like a “buydown” of the rate in an advertisement. A Realtor can cross over the line of his license by advertising specifics about the rate of a loan that could also be in violation of rules established by the Consumer Financial Protection Bureau.
Triggering Terms are advertising points that require additional disclosures. Any time an advertisement discusses 1. The amount or percentage of any down payment, 2. The number of payments or period of repayment, 3. The amount of any payment, or 4. The amount of any finance charge.
The amount of a finance charge can include the buydown and therefore it could cause further explanation that is beyond the scope of a real estate license and gets more into mortgage license information.
It is much safer for listing agents to advertise that the seller is willing to pay “closing costs.” By offering that not specific term, a buyer can apply the closing costs to points, loan origination, upfront HOA fees, document preparation fees and much more.