“Coming soon!” What’s the point?

Not long ago, Allison McLure, our fiery-haired trademark guru, wrote a blog on a recent trend that began in the U.S. and has since seeped over the border to Canada: real estate people using For Sale signs with banners of proud proclamations like “Coming Soon.” Some of the signs say horrible things like “Coming Soon to MLS®” which, as you all know, is a trademark infringement and causes those of us charged with protecting the marks to reach medically unacceptable stress levels.

The purpose of Allison’s post was to make it clear that you can’t use MLS® as a noun on these signs. And, because Allison’s column focused on trademark use and not the “Coming Soon” trend itself, some folks think we somehow endorse this … errr … whatever it is. To be clear, not only do I not endorse it, I don’t really even understand it (I know, I’m shocked too)!

I get asked a lot of questions about these “Coming Soon” signs. “Bill,” they ask me. “What does all this mean? How is this being documented? Are these listing agents entering into written contracts that allow this or are they operating under some kind of oral contract? What do these contracts say? Does this violate Board MLS® Rules?”

And my answer is the same answer that I give to most legal questions: “I have no idea.” As best I can figure, these are really just another form of exclusive or “pocket” listings. Pocket listings themselves are nothing new. The term generally refers to some kind of arrangement with the seller whereby the listing is kept off the Board’s MLS® System. We are used to formal “exclusive listing” contracts. But the question is: what is the deal between the listing agent and the seller in these “Coming Soon” situations?

If you’ve signed a standard MLS® listing contract, you are required by Board Rules to submit it to the Board within a short period of time. So if, in the meantime, you are advertising it as “Coming Soon,” you should rephrase that to “Coming REAL Soon.” And if that’s the case, what’s the point of going through this at all?

People also appear be using it as a type of “marketing” arrangement where the broker has some form of unwritten or limited agreement to “pre-market” or sell the owner’s property prior to executing a listing agreement. This has disaster written all over it. What exactly is this beast? Is it a “listing agreement?” We’re not sure.  Certainly, the REALTOR® Code requires all agreements of this nature to be in writing. So if it is oral, it violates that Code. Whether it’s written or oral, it may very well put you at odds with your regulator. I’d stay away from this kind of arrangement.

I’ve also heard of people signing an MLS® listing agreement, posting the listing on the Board’s MLS® System and not allowing showings for a period of time, during which you put out “Coming Soon” advertising. I have long held the view that if there are no showings allowed, the listing should not be on the Board’s MLS® System. Cutting off other members is totally antithetical to what the MLS® System is all about. But the real question is whether this type of activity violates your Board rules.

Ultimately, I think the greatest danger of this type of marketing is the risk the listing agent takes of violating his or her fiduciary duties to the seller. As an agent, you owe your client seller a duty of undivided care, loyalty and honesty. So that begs the question: is the pocket listing arrangement done solely for the benefit and in the best interests of the seller or is it done in the best interests of the listing agent? If it’s the latter, Mr. or Mrs. “Coming Soon,” you are in some trouble. I also think that if you are going to advertise this way, you should fully disclose the impact of waiving the benefits of listing on a Board’s MLS® System. For example:

1. Fewer people will know the home is for sale;
2. The seller’s ability to obtain the highest possible price for their home may be compromised;
3. Internet reach may be limited.

Interestingly enough, a number of Boards in the United States who have been dealing with this issue for a lot longer have put in Rules requiring these disclosures if you are entering into a “Coming Soon” arrangement.

At this point, no one knows if “Coming Soon” advertising is a fad, a paradigm shift or something in the middle. Whatever it is, those of you wishing to dip your toes in this little pond should beware of the alligators.

The article above is for information purposes and is not legal advice or a substitute for legal counsel.