What you should know about ‘coming soon’ signs

This week’s column was written by Gary Isom, executive director of the Arkansas Real Estate Commission.

The movie-theater lights dim, the crowd grows quiet, and the screen comes to life as a deep, resonant voice announces: “Coming soon to a theater near you ….”

In that setting, you know exactly what the phrase “coming soon” means.

But what about when you’re driving down the street in broad daylight, and you see an ABC Realty sign in your neighbor’s yard with the words “Coming Soon!”?

What exactly does “coming soon” mean then?

“Coming soon” signs are a fairly common sight these days, and they can be used for different purposes.

Preferably, these signs are used to notify buyers and buyers’ agents that a given property will soon be on the market but is not currently being shown.

There may be any number of reasons why the sellers aren’t quite ready to show their property.

Maybe they need time to make some repairs to the house before showing it. Or perhaps the sellers are loading up their brand-new RV and going off-grid for three weeks, during which time they don’t want to be bothered by pesky real estate agents trying to sell their house.

Whatever the seller’s reason for waiting to show the property, the “coming soon” sign serves to generate interest in the property prior to its placement on the market, thus enhancing the seller’s chances of a good sale once the property is shown.

We could certainly all agree that sellers stand to benefit in this scenario.

However, “coming soon” signs aren’t always used at the seller’s request — nor do consumers always stand to benefit from the use of these signs. Accordingly, sellers and buyers alike need to be more informed about the practice.

First, consumers should know that real estate firms have both buyers and sellers as clients. Just as a sellers can list property with a firm, buyers can hire that same firm to represent them in finding and buying their new home.

Next, consumers should be aware that if a listing firm posts a property as “coming soon,” the firm could be allowing for a period of time during which they limit the showing of the property to only that firm’s buyer-clients.

In other words, if ABC Realty has the property listed, only buyers who have hired ABC Realty to represent them can view the property.

In this case, “coming soon” signs may be used to attract potential buyer-clients to the listing firm, as buyers will use the contact information on the sign to reach the listing firm or agent directly.

In either of these scenarios, the firm stands to benefit from the possibility of collecting both sides of the sales commission at closing.

While using “coming soon” signs as described above is not prohibited, there are measures the listing firm should take to ensure that the seller’s best interests are represented.

The listing firm should first inform the seller that, for a certain time, their property will be shown and marketed on a limited basis and without exposure to the full market of buyers. If the seller is informed and agrees to this arrangement, it is fine, because the sellers will have been put on notice that their property will not initially receive full market exposure.

Most sellers can easily deduce that if they accept an offer prior to the property being placed in a Multiple Listing Service or advertised widely to all potential buyers, they may be leaving money on the table.

A motivated seller who needs to sell fast may be willing to accept that possibility. Regardless, the seller needs to know and agree to a “coming soon” sign being used in this manner.

For buyers and their agents, a competing real estate firm’s “coming soon” signs can be a source of frustration.

We often hear from buyers’ agents who are upset because they have contacted a

listing firm that has a “coming soon” sign on a property, only to be told the property is not yet being shown, denying their buyer-clients the chance to view and make an offer on the property. These same agents become more upset when they see the property placed in the MLS, only to be immediately shown as “sold.”

In this case, the agents feel their buyers should have been given the opportunity to see the property.

While this is understandable, if sellers have agreed to only receive and consider offers from their listing firm for a period of time before the property is opened to all buyers, that is the sellers’ prerogative, and they are not likely to be denied that choice by any real estate license law or regulation.

In fact, the Federal Trade Commission supports the position that consumers should have as many choices as possible.

Along those lines, the Arkansas Real Estate Commission encourages listing brokers to use “coming soon” signs in this manner to make full and thorough disclosure to their sellers so clients are well informed and understand what they are agreeing to if their property is to be marketed on limited terms.

The mission of the Arkansas Real Estate Commission is to protect members of the public who utilize the brokerage services of those people licensed by the agency. Consumers who have questions or concerns can contact the commission’s investigations section at 501-683-8010. Because principal brokers often welcome the opportunity to resolve a consumer’s concerns before a formal complaint is filed with the Arkansas Real Estate Commission, our investigators will often ask whether the consumer has spoken to the principal broker of the firm with which they are doing business. Consequently, many consumers will find their concerns adequately addressed by knowledgeable and responsive principal brokers.

Visit www.arec.arkansas.gov for more information about the Arkansas Real Estate Commission or to search for active licensees in your area.

House to House is distributed by the Arkansas Realtors Association. For more information about homeownership in Arkansas, visit www.ArkansasRealtors.com.