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.
This month The Ontario Real Estate Association released the results of an interesting survey conducted by Angus Reid on what’s on the mind of potential homebuyers and sellers. The results were quiet interesting. You can read the full report here; http://bit.ly/QjnXQB . The results of the survey were a perfect topic for today’s morning meeting. I decided to go through five of the top concerns and ask the agents what they would do to alleviate them. Here are their responses;
50% expressed concern over their ability to negotiate a sale price.
Hey, isn’t our job to negotiate on a client’s behalf? In order to prove you have the ability the agents agreed that a solid conversation about various scenarios is important. The client needs to feel confident in your abilities to put this concern to rest. New to the business? Go to your Mastermind group, or just read mine.
59% worried about their home taking too long to sell.
Again, it is important to get the price right from the start. Your discussion about time on market vs selling price is a powerful tool. Set expectations from the start by doing your research on average days on the market in the neighbourhood. Do a proper CMA (competitive Market Analysis) and show history of past sales, that should alleviate this worry.
60% said getting the property ready for sale.
“I know a guy”. Having a team of trades and stagers at the ready will help relieve this particular stress. Over the course of your career it is important to build your team of reliable connections and make sure you can deploy them quickly. Recently, one of our company’s top ten agents told me that he sends a staging consultant over to every listing.
61% said Understanding the process and legal documents is a concern.
Know your forms inside and out and take the time to explain them using plain language. When it comes time for offers on your listing it is important to remember that you are in charge. Your clients are under no obligation to accept any clause that they are not happy with.
77% worried about the state of the real estate market.
The agents had some great counter arguments to this worry. First of all real estate is a long-term investment. As cheesy as it sounds the old saying drives this point through; buy real estate and wait, don’t wait to buy real estate. Markets go up and down but the overall trend is up. While the media likes to suggest that the market could correct downward by 10% it is important to remember that a 10% decline in values just means that house is worth what it was last year. Finally, agents agree that staying sharp, focused and educated is our best defence. The reality is that deals are getting more complicated and the services of a realtor become even more important.
Finally let’s talk a little about going that extra mile. Last week our company held a Top Ten Mastermind session to talk about the market, what’s working or not working with respect to marketing, where are people finding new clients, websites, etc. It was a very interesting discussion with lots of anecdotal evidence which I will use for future blogs. Interestingly, the one thing in common with the top 10 was that they got a lot of their business through referrals. So I asked the question to the agents this morning; why are people referring you to other people? the answer, categorically, was that they worked hard at making the experience great. Not just good and successful, but great. It seems the experience is what matters.
Time to go out and make the experience great for your clients. Have a great week.
Years ago, I took an overpriced listing. I knew it was overpriced, but as I was trying desperately to establish myself in the neighbourhood, I took the listing anyway. It was one of the first multiple million dollar listings in the hood and if by some wild chance someone would pay twice what it was worth the sale would literally put me on the map. So I guess I was a little star struck by the sale price. It wasn’t as if I didn’t try to reason with the seller. I told him what my opinion of fair market value was but he didn’t care. In his mind the place was worth much, much more. Yes, I should have walked away but when the owner offered to pay for the marketing costs if it didn’t sell in six months, I truly thought I had nothing to lose. So I would be out some basic costs, big deal. For those six months I would have the most expensive residential property for sale in the neighbourhood.
I tell this story because in Mastermind last week we talked about marketing costs and whether it is fair to ask a seller to reimburse us if they terminate the listing or don’t accept a fair offer. An agent in my office said that the practice was part of his listing presentation. It seems valid. Most of the cost of listing a home comes before the property even gets to MLS. We spend a lot of money on pictures, video, floor plans, pre listing inspection, staging, flyers and property brochures. So what if after the first week on the market, the Seller decides not to sell? Does the agent deserve to be reimbursed? What if the Seller does not get the wildly over asking offer? What if the whole listing process was just a way to get an accurate appraisal for the bank or some crazy fishing expedition to figure out what the house was worth?
Last year, a similar story appeared in the Toronto Star. A Toronto man was sued by his agent for the costs associated with staging his home. The owner was quoted as saying that selling his house at the price offered would mean taking a $50K loss and apparently he felt it was wrong for the agent to sue him knowing he would lose money. In the end, the owner settled out of court for around half, claiming that the cost of small claims court and legal fees would have cost him more. Well it was clear that listing a home to figure out what your house is worth may not be the best idea but what is interesting is that the listing agent suspected from the start that the owner wasn’t really serious about selling.
Obviously a marketing contract could be a useful thing but the question remains, do you think you would lose out on a listing if you insisted on having sellers agree to this? Is it possible that if a client refuses to repay you he probably never had any intention of selling in the first place? Food for thought.