April 29, 2016
COMING SOON SIGNS AND RIDERS
In response to growing industry concerns about the increased use of Coming Soon signs and riders, the Colorado Real Estate Commission recently issued Commission Position 44 – Commission Position on Coming Soon Listings. However, the Division of Real Estate continues to receive calls from the brokerage community with questions and concerns about the practice.
When used appropriately, Coming Soon marketing may benefit the seller by alerting the marketplace to the impending availability of a property that might not yet be “show-ready”. It is generally in the seller’s best interest to make sure their property’s appearance is optimal prior to making it available to potential buyers. While an owner is making repairs or upgrades, their broker can potentially stoke the interest of the marketplace by making the public and industry aware of the soon-to-be-listed property. Ideally, this increased awareness will result in a stronger market for the property than if it had not been pre-marketed.
The problem occurs when Coming Soon marketing is used by the listing broker to limit, and not enhance, the market exposure of a property. Some listing brokers attempt to broker both sides of the transaction by soliciting unrepresented buyer calls through the use of the coming soon signs and riders, negotiating the sale of the property, and only entering the property into the MLS after the contract has been executed or even closed. These transactions will often be identified by MLS entries showing 0 days on market. All Colorado real estate brokers are required to display reasonable skill and care. Further, real estate brokers acting as agents for the seller have the additional requirement to promote the interest of their clients with the utmost good faith, fidelity, and loyalty. Intentionally limiting the availability of a seller’s property without their knowledge or consent would be viewed as a violation by the commission.
Keep in mind, there are a variety of legitimate reasons why a seller would knowingly elect to limit the exposure of their property. Many sellers value speed of transaction and convenience over net proceeds. These sellers, like all sellers, are able to decide how, when, and where their properties are going to be marketed. The Commission’s concern is that these decisions be fully-informed decisions. The role of the broker is to advise the seller as to the benefits or risks of any chosen marketing method. Additionally, any decision by the seller to limit the marketing of the property should be clearly documented in the signed listing contract prior to any marketing being performed.
Click the Button to Review CP-44 Coming Soon Listings. This article was emailed to interested parties by the Division of Real Estate. We post it here as a benefit to our students.