Advertising listings as “coming soon” and subsequently selling them “off market” is only OK if sellers realize the risks — and agents aren’t just trying to collect both sides of a commission, according to Colorado state regulators.
Premarketing listings as “coming soon” or selling them before listing them in the multiple listing service is controversial. Some industry experts argue that limiting a property’s exposure could result in a lower sales price than if the property were listed in the MLS. At the same time, listing agents stand to benefit from the practice if they are able to round up an unrepresented buyer and thereby double-end a deal.
Sellers could lose as much as 25 percent of their homes’ value by going under contract before hitting the market, Boulder agent Marcia Cotlar told the Denver Post.
“I think sellers these days are, ‘Oh, my God, I can get that much? I’ll take it,’ where really the seller can get even more than that,” Cotlar said.
Because of these potentially competing interests, brokers must warn sellers of the risks of limited exposure, and also consider the motivation behind it, the Colorado State Real Estate Commission said in a position paper on “coming soon” listings issued earlier this month.
Marketing a property as “coming soon” because it is being prepared for sale or lease is “legitimate,” the commission said. But if the purpose is to boost the broker’s pay, that would be a violation of license law, the commission added.
“[A] broker who places the importance of his commission above his duties, responsibilities or obligations to the consumer who has engaged him is practicing business in a manner that endangers the interest of the public,” the paper said.
The National Association of Realtors told the Post that Colorado is the only state it knows of that has published such an opinion.
The commission’s paper warns that a broker who fails to tell a seller the risks or doesn’t allow the seller to decide how the property will be marketed may be disciplined by the commission. But no agent has been punished yet, according to state regulators.