"Coming Soon" An appropriate marketing tool.....or risky practice?

“My seller is almost ready to put their house on the market - but wants me to put up the For Sale sign with a Coming Soon rider. The house won’t be ready for showing for another week, but the seller wants to stir up some anticipation.  Is this acceptable?”

Recently many of us have seen some of these signs pop up in our neighborhoods.  The MLS staff receives calls from members who see a Coming Soon sign in the yard of a property that their buyer would like to see, they cannot find the property in MLS, and after calling the listing company are told that the property is not yet available to show. 

To be sure, the Coming Soon sign can be an appropriate marketing tool for a property that will soon be available for sale.  Unfortunately, the Coming Soon sign, alternatively, can be what really amounts to an unethical practice.  This discussion seeks to illustrate why the use of a Coming Soon sign may or may not be appropriate, and that it can be a risky practice. 

The Rules

Central Ohio Regional MLS rules and regulations require that all eligible listings be entered into the MLS system within 72 hours of signing the listing agreement, unless the seller has given the agent specific written instructions to the contrary.  The rules do recognize that a seller does have the right to instruct the listing firm to withhold the listing from MLS, pursuant to what is referred to in the MLS rules as an “office listing”. 

The “office listing” must still be in writing, and must still be registered with the MLS, doing so will provide protection to the listing agent/broker from a charge of rules violation. The Notice of Office Listing form, which is available from MLS, documents in writing that the listing agent has explained the benefits of the MLS to the seller, and that the seller has directed that the property not be entered into the MLS database.  (Other members are permitted to inquire with the MLS staff whether a Notice of Office Listing has been filed.)

Additionally, the NAR Code of Ethics, Standard of Practice 3-10, obligates REALTORS® to share information on listed property, and to make listed property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords.  Ohio License Law reiterates these same duties to act in the best interests of the client.

Why would any seller want to withhold their property from the MLS?  Sometimes there are valuables such as art collections, etc., and the seller wants only their listing agent to conduct any showings.  While there may be some work-around other than keeping the property out of MLS; legally, the MLS cannot force a property owner to have their property shown in MLS.  Generally, the seller’s wishes must be respected.
  
Examine the Motive and Rational

It is recommended that agents exercise extreme caution when recommending or agreeing to withhold a client’s property from MLS.  When considering whether or not to list the property in MLS, it is advisable to closely examine the motives and rational for that recommendation.

• Is it the seller’s intent to build interest in the property while repairs or some other work is being completed, and to not show the property to anyone until the repairs are complete?  If the answer is yes, then the Coming Soon sign could be appropriate.

• Is the Coming Soon idea really meant to give the listing agent an exclusive window of opportunity to sell it themselves, while keeping others from showing it?  If so, the practice may be unethical and even illegal under Ohio license law. (Both Ohio License Laws and the Code of Ethics require REALTORS® to act always in the best interests of the client.)

• Does the seller or the brokerage actually intend to preclude some buyers from seeing the property?  If so, the practice may be illegal under Fair Housing laws.

Consider the Risks

The real estate industry is fully aware that in a situation where only certain potential buyers are being shown a property, while others are not, can be a serious problem.   If NO ONE can see the property yet because the property is not on the market yet, then the Coming Soon sign can be acceptable.  However if ONLY SOME and NOT OTHERS are permitted to see the property while it is being advertised as Coming Soon, some red flags are raised.

Before posting that Coming Soon sign, ask the important questions above.  Decide whether the property really is “coming soon” (as in not yet for sale), or is it really a listing that will bring into question the ethics and fair housing practices of both seller and licensee, placing the agent and their broker and potentially the seller as well at risk.  And always, always, always get permission and instructions from the seller in writing and signed.