Craigslist scams 

The broker received a call from the seller who was approached by a woman who said she had rented her house. The woman had all the pertinent information about the house and was ready to move in, saying she had sent her security deposit in response to a Craigslist posting. What can the broker do about such scams?  

Numerous REALTORS^® have discovered that information from their listings is being used to create fake Craigslist listings. Reports include rental property listings as well as listings for sale. The falsified advertisements show up on Craigslist, with rentals sometimes being offered at lower prices, with different contact information. The would-be tenant contacts the person who made the post and is directed to wire money overseas. 

For REALTORS^® or property owners, the first call should be to Craigslist. Upon notification, Craigslist has agreed to take down the illicit postings immediately. Anyone who has been a victim of an online scam should contact the Consumer Protection Division of the Wisconsin Department of Agriculture, Trade and Consumer Protection at 1-800-422-7128. The DATCP advises consumers to be cautious about how and where they send money when replying to online ads. REALTORS^® may wish to monitor Craigslist to make sure their properties are not being advertised without authority. 

Both REALTORS^® and consumers are urged to double check their contacts when dealing with online real estate transactions — especially if the other party is asking them to wire money out of the country. 

Rich international buyers 

The broker received an email from a person claiming to be moving to Wisconsin and in need of housing for himself and his family. The potential buyer wanted the broker to secure housing and in some cases find furniture and furnishings to complement the house as well. The buyer asked the broker to send him an offer electronically for his signature. How should brokers respond to such inquiries?  

The first step is to remember the old adage: if it sounds too good to be true, it probably is. This buyer scam has been reported in various states, including Wisconsin. The foreign buyer contacts the agent, having identified a property on the internet and ready to make an offer and send funds for the earnest money and the purchase price. The buyer has a financial manager or attorney who is typically named (many have the last name "Jackson"), often is said to be in Canada, and who will forward a check for the funds. The broker, wishing all buyers were this easy to please, may unwittingly get caught in the middle of this scam.

Brokers must be wary if a buyer offers to send money equal to or exceeding the amount of the purchase price to be deposited until closing. In the reported scams, the checks later turn out to be no good - but it appears that the goal is to have a check drawn on these funds and sent back to the buyer before that can be discovered. Variations of this scam may involve property rentals where the person wants to have his account manager send one or more large deposit checks to the landlord or property manager that will turn out to be too much and he will need funds returned. Brokers must always be careful when handling funds in trust accounts, property management accounts or business accounts. Confirm with the bank that deposits have cleared before writing any checks against those funds. Ask the party whether they can wire funds instead of using checks drawn on overseas banks because that is much safer.

Authority to advertise 

A Milwaukee area real estate agent is advertising several listings of various other real estate agents on Craigslist. This includes several listings from the broker’s office and the listing agents had no idea this was being done. How to proceed?  

If the advertisement suggests to the public that the agent advertising the listing was the listing broker, then that practice is arguably misleading advertising in violation of both state license law and, if the other agent is a REALTOR^®, the Code of Ethics. The advertising of another broker’s listings on a website is subject to compliance with Wis. Admin. Code § RL 24.04, Article 12 of the Code of Ethics, company policy and MLS policy including internet Data Exchange (IDX). IDX allows for posting another company’s listing when IDX policy is followed. The broker may check with the local MLS for IDX rules. Article 12 states that REALTORS^® shall be careful at all times to present a true picture in their advertising and representations to the public. 

If the broker believes that this practice violates § RL 24.04, the broker may file a complaint with the Department of Regulation and Licensing. If the broker believes this practice violates Article 12 of the Code of Ethics and the other agent is a REALTOR^®, then the broker may file a complaint with the local board. 

Expired listings 

The broker has found many listings online that have been expired, sometimes even relisted, with other brokers. Isn’t this unauthorized advertising?  

Once a listing contract expires or is terminated, the company has no further rights or authority with respect to the listing, other than any listing protection or override rights with respect to properly qualified buyers. All marketing by that company must stop.

Marketing includes a variety of items including, but not limited to, signage, datasheets, MLS, company websites, personal web pages and all other internet advertisement. Agents and brokers need to be diligent in removing all of the advertising information placed out in the market after a listing contract expires or terminates.

If a company continues to market a property after the listing contract expires or terminates, the company may be in violation of the following license law and Code of Ethics provisions:

Wis. Admin. Code § RL 24.04(1) FALSE ADVERTISING states, "Licensees shall not advertise in a manner which is false, deceptive, or misleading." If the company is still portraying that they have an active listing contract after the term of the contract has expired or been terminated, then the company is advertising in a manner that is false, deceptive or misleading.

Wis. Admin. Code § RL 24.04(3) provides: "ADVERTISING WITHOUT AUTHORITY PROHIBITED. Brokers shall not advertise property without the consent of the owner." If the listing company is advertising without proper authority, the listing broker risks investigation and discipline by the Department of Regulation and Licensing. Once a listing has expired, so does the listing broker’s authority to advertise the property, unless a new listing is negotiated.

In addition, if the licensee is a REALTOR^®, Article 12 of the Code of Ethics requires REALTORS^® to be careful to present a true picture in their advertising and representations to the public. Article 12 provides that "REALTORS^® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations." 

Tracy Rucka is Director of Professional Standards and Practices for the WRA.