Another place the general “truthful and not deceptive or misleading” rule applies is with “inducements.” Inducements, like free home warranties, discounts, trips, merchandise and so on, given to encourage listing property or utilizing other broker services are now common in the industry. Inducements continue, however, to have a bad name. In fact, many Oregon brokers appear to believe they are illegal when in fact they are not. As long as the inducements are truthful and are not misleading – the consumer actually gets whatever is offered – and they do not run afoul of commission-sharing rules they are not illegal. Commission Sharing is covered under the main topic Working With Clients.

A form of inducement that is becoming more prevalent in the market is offering a selling bonus to the selling agent. Such bonuses do not violated commission sharing rules because the recipient is licensed. Truthfulness is usually not a problem with selling bonuses as long as there are no hidden criteria for collecting the bonus. Selling bonuses do, however, raise disclosure issues for the selling agent. Because the agent is receiving a bonus in money as a result of their representation, the agent must disclose the bonus to their client. The duty to disclose a bonus is a function of the duties of loyalty and disclosure agents owe their principal. Click Here for a detailed discussion of agency duties.

Normally, the truthfulness requirement doesn”t cause any problems with inducements. The exception is not including the full terms of the inducement in advertising. To meet the truthfulness requirement, the consumer must be able to tell from the ad what action is required to receive the inducement. Take, for instance, an ad that says: “List your house with us and we”ll send you to Hawaii.” On its face, there is nothing wrong with the ad. If, however, there are strings attached such as the property must be worth more than $500,000 or must sell in-house or for full price, truthfulness will require the ad contain the qualifying conditions or at least some warning that additional terms apply.