Advertising that contains blatantly false or misleading information is called false advertising.  False advertising by a seller constitutes misrepresentation and thus gives the buyer relying on it, grounds for canceling his or her contract to purchase.

In certain cases, false advertising may constitute fraud and would be grounds for a court to award a money judgment for any damages suffered.  Generally, a real estate licensee found responsible for false advertising is subject to suspension or license revocation.  A non-licensee who makes false representations (for instance, in respect to a subdivision) may be subject to criminal prosecution. 

Your listing agent is required by law, to disclose any issues with your property.  She/he may not provide fraudulent information without running the risk of losing her real estate license.