There’s been a recent surge of confusion and angst over “coming soon” or other similar “pre-marketing” techniques. Whatever you might call it, brokers and agents need to remember that all marketing and advertising has to abide by the same basic rules.
Whether your listing is coming soon or already here, remember these dos and don’ts to make sure you’re staying compliant and protecting yourself.
DON’T advertise a property without written permission of the seller.
Standard of Practice 12-4 says Realtors® “shall not offer for sale/lease or advertise property without authority.” Section 604(a)(8) of the Real Estate Licensing and Registration Act goes further and prohibits “advertising any property without the written consent of the owner, or his authorized agent.” Whatever the strategy is called, advertising without permission is prohibited.
And yes, Virginia, posting property information on Facebook or your website is advertising.
DO get a listing agreement. By which I mean a legally compliant and fully executed one.
Of course the most likely place to get permission to advertise is the listing contract, right? Though it theoretically may be possible to get advertising permission as a standalone document, it isn’t advisable.
Remember that RELRA says a licensee “is not entitled to recover a fee, commission or other valuable consideration in the absence of” a signed agreement laying out the licensee’s services and the fees to be paid. There’s also a list of specific items that much be included in an exclusive listing agreement in order to be valid. A standalone document that only gives permission to advertise, but doesn’t meet these requirements won’t protect a broker’s right to be paid.
Further, Article 16 of the Code of Ethics says “Realtors® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other Realtors® have with clients.” No listing contract means no exclusive agreement…which means that other Realtors® are not prohibited from walking right up to that house and asking for the listing.
Finally, we’ve seen some instances where agents have sellers sign a listing contract, but don’t sign it themselves. Their argument appears to be that the seller’s signature has given advertising permission and committed to the exclusive relationship, but that the lack of broker’s signature means that MLS rules don’t apply yet. Sorry, but no. A contract isn’t a contract until both parties agree to it.
DO learn and follow your MLS submission rules.
MLS rules generally require that all listings be entered in the MLS within a certain period of time – usually 2-5 days. If the listing is to be an office exclusive, it still must be submitted but with a “certification signed by the seller that he does not desire the listing to be disseminated by the service.”
Regardless what you call it, once you get the listing contract signed, you must meet the MLS timeline for submission. Either it’s entered and given a status (some MLSs allow some sort of off-market/coming soon status; others don’t), or it’s submitted with a waiver that it’s not to be displayed.
DO explain to your client what a waiver means.
The No. 1 suspicion we hear about seller MLS waivers is that “the seller didn’t understand what she was signing. If it was explained to them, they wouldn’t have agreed to it.” So, if this is part of your practice, make sure every waiver is an informed waiver, so there’s no question that the seller understands any plusses and minuses that may come from this sort of marketing. Some waiver forms even have that language right on the form – “I understand that this could be better for me because ____, and might be bad because ______, but this is what I want.” Should you find yourself on the wrong end of an ethics complaint, this sort of thing could be a great help.
DON’T misrepresent the listing status.
There are two common scenarios we’re seeing here. The first is the listing entered as “temporarily off market” or “no showings”, when it turns out the listing agent has been showing the property to his own buyer-clients. That’s a problem – no showings means no showings. If what the agent means is “I’ll show it to my own clients, but won’t let anyone else in,” then the correct approach likely is to keep it from MLS display, since there’s no cooperation or compensation on the table.
The second is agents who include comments like “seller will review all offers Sunday at 5 pm,” but then regularly marks those listings as sold on Friday afternoon. If the intent is actually to hold all offers until the stated time, then fine, but if it’s entered that way to delay cooperating offers while the listing agent works to get offers from her own clients accepted earlier, then this is probably less than a “true picture” of the situation.
Remember that listing statuses are pretty much controlled at the local MLS level. If you feel there should be more or different statuses to reflect common local business practices, you should discuss those issues with the MLS.
DON’T get cute.
If there’s one piece of advice I could give, it’s “don’t get cute.” Learn the relevant rules – which you’re probably following in the bulk of your practice already – and figure out the pretty simple changes or addenda you need to create (perhaps through your brokerage counsel) in order to accomplish your goals. If you just think it through, it’s not that hard to engage in most legit business practices and follow the rules at the same time.