PSI Virginia Real Estate Practice Exam

What is a key principle of Truth in Advertising in real estate?

1. All advertisements must include a professional's name

2. Advertisements can include subjective claims about properties

3. False or misleading advertisements are illegal

4. Advertisements do not require compliance with local laws

The correct answer is: False or misleading advertisements are illegal

The principle that false or misleading advertisements are illegal is crucial in real estate as it promotes honesty and transparency in the marketing of properties. This principle ensures that all representations made in advertisements are truthful and not deceptive, allowing consumers to make informed decisions. Misleading claims can lead to buyer frustration and distrust in the market, potential legal ramifications for the advertiser, and an overall negative impact on industry reputation. Real estate professionals are responsible for accurately portraying their listings and avoiding exaggerations or false statements about property features, pricing, or conditions. Compliance with this principle not only adheres to legal standards but also fosters a fair marketplace where consumers can trust the information they are receiving. The other options relate to advertising practices but do not encapsulate the essence of Truth in Advertising as effectively. For example, while including a professional's name may be necessary for credibility, it does not address the accuracy of the advertisement itself. Subjective claims may not necessarily be false but can be misleading, which can compromise the integrity of the advertisement. Additionally, compliance with local laws is important, but it does not negate the requirement to provide truthful information.