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DRE Addresses Risks of "Coming Soon" Advertising
"Be Sure to Maintain Fiduciary Responsibility for Your Client or Face Civil and Regulatory Liability"
In its 2018 Winter Real Estate Bulletin, the California Department of Real Estate (DRE) discusses the risks of "Coming Soon" marketing in an article titled "Be Sure to Maintain Fiduciary Responsibility for Your Client or Face Civil and Regulatory Liability," including the following:
"The potential conflict a "Coming Soon" strategy can have with a licensee's fiduciary duty comes when the listing agent begins accepting offers before the property is exposed to a larger audience via a multiple listing service or by other means. When a property is not exposed to the full market, a client's best interests might not be served, even when a full price offer is received (because the property may well have sold above the marketed price if better advertised). Imagine the dilemma for a listing agent if a seller accepts an offer on a poorly marketed property and then receives much higher backup offers as the property receives greater exposure.
At a minimum, an agent should disclose that a better sales price could be obtained if the property were to be marketed on a multiple listing service and obtain the seller's prior written permission that she or he agrees to not fully market the property.
A listing agent who encourages the use of a "Coming Soon" program, without broadly advertising a property via a multiple listing service or other means, especially exposes himself/herself to the potential for an increased chance of civil liability and regulatory action when the agent also then represents the buyer in a dual agent capacity. Such a dual agent would need to be able to demonstrate that the agent acted in the best interests of the seller to obtain a purchase price that was as high as could be expected for a fully marketed property." (Read more)
DRE Best Practices for Listing Agents:
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Market the property via multiple listing service or other broad advertising means.
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Make sure the seller agrees to and understands how the property will be marketed.
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If using a "Coming Soon" strategy, do not accept and act on offers until a property has been broadly marketed.
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If the property will not be fully marketed, obtain prior written permission from the seller that demonstrates they understand that such a "Coming Soon" strategy may not result in receiving the best sales price.
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Avoid double-ending a property that is not fully marketed—it is best to refer potential buyers to another agent.
