Legal Blog - Listings

 

Best Practices for ‘Coming Soon’ Listings, School Ratings

By:
  • Matthew L. Troiani
May 2, 2019

Q. I’ve been seeing a lot of properties advertised online or on signs as “Coming Soon,” but the property is not in the MLS, and the listing agent is permitting showings. Is this legal, ethical, or a violation of the MLS rules?


A. The answer is that it depends. We appreciate and understand the concerns regarding “Coming Soon” advertisements and so-called “Pocket Listings.” There are certainly ethical and contractual implications to this type of behavior, but it is possible to do this legally and ethically.

“Coming Soon” has become a common term of art in the industry, even if it started as an MLS status definition. There is no legal definition of “Coming Soon” outside of the MLS. The MLS status does not permit showings, but a property can be marketed as “Coming Soon” outside the MLS without violating ethical and contractual obligations. The method for doing so, however, is fairly narrow.

Advertising a property without creating a listing in the MLS is not a violation of the MLS rules, so long as the sellers have given written instructions to the listing agent that they do not want the property listed in the MLS, or not listed until a certain date. An MLS cannot require that its subscribers and users only advertise through the MLS. Sellers may opt-out in writing or delay putting the property into the MLS until a certain date, while still authorizing the listing agent and broker to market the property by other means. The Pre- Marketing Addendum to the Listing Agreement does allow broad latitude to the listing agent regarding pre-marketing the property.

There are potential Code of Ethics (COE) concerns with this behavior, but it can be done ethically. According to Article 1, Realtors® “pledge themselves to protect and promote the interests of their client. This obligation to the client is primary ….” Generally, the seller is best served by marketing the property to as many potential buyers as possible. However, a seller may have personal reasons for wanting to limit broad marketing until a certain date. The seller might be traveling, expecting company or undertaking renovations. Perhaps the listing agreement was signed during a slow time of year, and they want to build interest in the property until market activity picks up. In a seller- friendly market, sellers could still receive multiple competitive offers without having the property in the MLS. Sellers are entitled to make an informed judgment as to how they market the property.

While it is ultimately up to Realtors® serving on the Professional Standards panels to determine COE violations, the question is whether the “Coming Soon” advertisement is for the sole benefit of the seller and not the listing broker. This can be difficult to prove by clear, strong and convincing evidence. Some examples of putting the brokerage’s interests before the clients may include, but are not limited to, only allowing showings to unrepresented buyers or buyers represented by the listing brokerage.

It is possible to violate the COE through “Pocket Listings,” but it is also possible to advertise “Coming Soon” listings and allow showings (if not in the MLS) in an ethical way. The key questions are: 1) has the seller given informed consent through written instructions to the listing broker; and 2) is the listing broker acting in the sole interest of the seller?

Q. Many Realtors® are familiar with the online school ratings systems, but those systems may not provide significant data and the process can lack transparency. Are there other resources that we can provide to our clients, so they can make an informed decision about schools?



A. Fortunately, the Commonwealth of Virginia and many local counties have resources for clients who are researching school districts. The most comprehensive resource in Virginia is likely the State Department of Education’s School Quality Profile. This can be found at schoolquality.virginia.gov. The Profile contains many data points and measures year-over-year changes to give a thorough profile each school. Other resources include:

•    The State Department of Health 2015 Youth Survey results: fcps.edu/blog/2019-family-engagement-survey.

•    Arlington County’s 2017 Site-Based Survey results: apsva.us/planning- and-evaluation/evaluation/surveys/site-based-survey.

•    Alexandria City public schools reports and surveys: acps.k12.va.us/Page/460.

Realtors® should never decide which schools are the best for their clients. If a client is interested in learning about schools, there is a wealth of information available so that the clients can make informed decisions.

Group(s):
  • Standards and Ethics
  • MLS (Multiple Listing System)
  • Listings
Categories:
  • Realtor® Professionalism
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