The Washington Post
Real Estate Section, March 2, 2013
Postsez…good article on getting your house ready for
sale but what caught my eye was a quick remark on marketing by agents with “Coming
Soon” sign riders.
Richardsez…At my company, McEnearney Associates, Inc. we have
strict policies on putting up those sign riders, or also known as teasers.
Let’s explore the three parties in this transaction,
potential buyers, the listing agent, and the seller.
The Buyers
There are a lot of buyers who cruise neighborhoods, personally
I think they are savvy buyers. Houses that have the “Coming Soon” rider aren’t
in the MLS (in the DC Metro area, it is called MRIS), so if something is coming
on the market in a neighborhood you like and you spot the sign, you have an
advantage.
What to do with this info? The buyer has two choices; they
can call their buyer agent or the listing agent. Typically, the buyer’s agent
sees that the listing isn’t active and calls the listing agent for information.
Now the listing agent may not even have a listing price agreed to yet with the
seller, or some of the repairs and improvements may not be completed, or the
sign company put the sign up early. The upshot is that buyer’s agent must wait
until it goes active.
Now, what if a buyer isn’t represented (not suggested by this agent) and calls the listing agent directly?
This scenario is filled with ethical problems for the listing agent. The ethical
agent will advise the caller that he/she can’t disclose any information yet
other than when it’s going active, and because it isn’t active in MRIS, he/she
can’t allow any “private showings.” Now once the agent has activated the
listing, he/she can immediately call back buyers and show the listing to those
who called from the “coming soon” sign. But that probably leads to dual agency,
and that has its own ethical challenges for the listing agent.
The Listing Agent
When I was 20 and got my license in Kentucky (many years ago), the only party
represented in the transaction was the seller. Even the agent who had the
buyers and wrote the contract was representing the seller, known as a
sub-agent. Some politician got a good idea and said buyers should have
representation, so as an agent, you could represent both buyer and seller, or
just one side, you just had to disclose your relationship. Last July, it got a
bit more complicated in Virginia and now dual agency means you can’t really
represent anybody in the transaction, you’re just more of a facilitator and you
still have to disclose your relationships with the buyer and seller. (That law is worthy of its own discussion at
a future date.)
So what’s in it for the listing agent? If he/she is ethical
and following the law, you can’t reveal any information (price, etc.), allow a
private showing or market the house for sale. Now some agents want to get both
sides of the transaction and have a quick sale. There isn’t much advantage for
the seller here, and the primary job of the listing agent is to represent
the seller’s best interests.
I’m not saying that an agent shouldn’t ever use the “Coming
Soon” rider. One, many sellers want to create a buzz about their house and instruct
us to put one up believing this is how to do it, and surely, it can develop
initial interest if done on a timely basis. One strategic situation may be a
case where we want to launch the house on Thursday so we can have an open house
on Sunday and get that information populated to the websites so people are
aware of the listing. So on Tuesday or Wednesday, the sign goes up but it isn’t
on the market yet, in that case, we must put up the “Coming Soon” rider because
it isn’t active and we must properly display its status.
There is a listing in my neighborhood, it is listed with one
of those limited service agency listings, and the sign went up in October 2012
with a “Coming Soon” rider on it. As of March, it still isn’t active and the rider
is still up there, whom is that helping?
The Seller
Buyers want the
minimum price for a house, and sellers want the maximum price. If I represent
the seller as the listing agent, I want that seller to get the best price the
market, not one buyer, will offer. It’s called market dynamics and that can’t
happen with just one buyer. Everybody can agree that no seller wants hoards of people
marching through their house day after day. Sellers would prefer that it be on
the market for no more than a day, and who can blame them! Nobody wants to keep
the house spotless for weeks at a time and always having to leave when buyers
show up; and the rejection—who wants it?
Yet, the best course of action is for the seller’s house to
be exposed to the entire market and that dynamic will create the best offer for
the seller. It may be only one offer that comes 45 days after the initial
listing, or there could be a bidding war break out on the day of the open
house. Regardless, when an offer is presented after it has been fully made
available to all potential buyers, this is the best check that the seller got
market value, or the most likely sales price for their home.
It still possible that the savvy buyer was the one who
purchased the home and the seller received the maximum price that the market
would pay, and all agents in the transaction performed their ethical duties
while receiving a commission for their efforts. That’s a winning formula for
everybody involved.
How to find a good
real estate agent.
Washington Post, March 2, 2013
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