I would be the first to admit that the latest real estate craze, the “Coming Soon” sign, is a bad idea. Okay, I get it. It’s a marketing ploy. It tells potential buyers out there that you are going to be listing a home soon BUT if you call me directly maybe you can beat the rush. That’s called double-ending. It means the listing agent represents the seller and the buyer in the transaction. While, in theory that sounds good, and there may be some commission savings, the process is fraught with legal dangers and should be avoided unless you have some process in place to create a fair and level playing field.
Now, there are agents out there who can use the sign effectively and they will tell you that when they hang out the “coming Soon” sign they are sending a message to potential buyers that the home is under contract, commonly known as an exclusive listing, and that after getting it all painted, staged and looking it’s best, it will move to MLS. Hey, if that’s what you are doing then call it what it is…an exclusive listing. Unfortunately, the concept of “Coming Soon” sign is entering the minds of sellers out there that they think this is part of a strong marketing campaign and I have heard from agents who said they didn’t want to have a “coming Soon” sign BUT the seller insisted.
But here is why I don’t like it. It can be easily abused and be confusing to potential buyers. Last week a coming soon sign showed up at a house across the street from me. I remembered that house being on the market 6 or 8 months ago, and selling in multiple offers, and thought it was weird to see it back up for sale. The “Coming Soon” sign was up for about a week and although I have no proof on the number of sign calls the agent received, I can only imagine, given how hot my neighbourhood is and the incredible demand for detached homes on my street, that he was a busy boy. Yesterday I noticed the sign had changed, but it didn’t change to a for sale sign, it now read “For Lease”. wait a minute. They used a “Coming Soon” sign to announce a lease? I have to say that I had an unpleasant taste in my mouth which got worse when I looked it up to see that it was not even the whole house for lease but a single suite.
So imagine the call that agent would receive…”Hi, I’m calling about 123 Main St. I saw your sign. I’ve been looking for a detached home in the neighbourhood. How much are the sellers asking?”. “Oh that home ISN’T for sale. It will be available for lease next week but perhaps I can show you some other homes in the area”. Honestly, I feel like I need a shower after that exchange.
The fact is that there is no law that says you can’t use a “Coming Soon” sign to advertise a lease. And while I find this tactic unsettling it is probably not technically misleading. Is it unethical? Again, probably not. So why does it rub me the wrong way? I think it is because the intent of a coming soon sign is to announce that the property will be coming up for sale. Was the agent just using the “Coming Soon” sign to capture more leads? And if he was, do you find anything wrong with that? The reality is that agents are all looking for an advantage. Competition for buyers and sellers is fierce. If the tried and true techniques aren’t getting you business then agents are pushing the envelope to the detriment of an unsuspecting public.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President of the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.
We all know it. In real estate there are differences between clients and customers. We learn these differences very early in our education and training. We talk about fiduciary duties, accounting, fair and honest service etcetera, but the reality is that often those lines get blurred and that puts us into a difficult situation. Case in point. An agent, lets call him Terry, gets a call on one of his listings. The couple want to look at it at 5pm on a Thursday. Terry is not available to show the property so he gives the lead to Fran, an agent in his office who often acts as a buyer agent for him. Fran meets the couple at the condo and shows them around. They spend a long time there and ask Fran a bunch of questions about the property such as, what closing are the sellers looking for, what is included and excluded, and what facilities are in the building. Fran is happy to answer their questions. After a few minutes, it is clear that this couple is very interested in the condo. They start asking more questions about past sales, additional parking costs, maintenance fees and reserve funds. Fran knows the building and answers their questions. Finally the couple tell Fran that they are prepared to make an offer. They want to know why the seller is selling, what the Seller is likely to accept, closing date, and how much commission the seller will be paying and what clauses they should include in their offer. Fran is no dummy. She advises the couple that the property is inline with past sales and is well priced but gives no details into motivation or details into the listing contract.
The couple tell Fran that their lawyer has advised them not to sign a BRA and that they should only enter into a customer agreement. They also feel that it is only fair that since they contacted the Selling agent directly they should only pay 1/2 the commission however they still want Fran to prepare the offer. So here is the crux of the situation. Fran, has treated them, for the most part, like clients. She has provided information and offered advice on the property before establishing what kind of relationship the couple wished to assume. This creates a problem for Fran. If something were to go wrong during the transaction the couple could hold Fran responsible. She has after all put herself into an implied client/buyer relationship. If she knew that the couple wanted only to be customers, her answers on most of the questions would have been much simpler…”Please have your lawyer direct his questions to the Sellers or the Sellers agent”. By doing so, she exonerates herself from any potential question of representation.
As to the comments about commission, the answer again is simple. “My firm has been retained by the sellers to market their property for sale. The details of that contract are confidential and do not impact the sale price”.
It is only human nature to want to help and that desire becomes stronger when there are dollar signs on the other side, but the pitfalls of taking too many assumptions can be equally devastating. The example above highlights the importance of that critical first interaction with a potential buyer who you meet through a direct call or even at an open house. The realities of the Toronto market are that buyers are looking for a price advantage, just don’t let your eagerness to make a deal cloud your judgement.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.