New Brokerage “Coming Soon”

By Stephen L. Fussell, Senior Consumer Protection Officer

The Commission’s Regulatory Affairs Division (formerly Legal Division) has experienced increased call volume recently regarding the use of “Coming Soon” sign riders attached to “For Sale” signs. The two primary questions asked by callers are, “Does ‘Coming Soon’ mean that the property is currently listed, but not yet available for showings?” and “Does it mean that the property is not yet listed, but will be listed soon?”

A broker is required by Commission rule to enter into a written brokerage agreement with a seller-client before marketing the seller-client’s property. Thus, a broker is permitted to place a “For Sale” sign (with or without sign riders) on a property only if a written brokerage agreement is in effect that authorizes the placement of a sign on the seller-client’s property.

If the seller-client wants the broker to begin marketing the property immediately to generate interest by prospective buyers, but the property is not yet ready to be shown, then this information should be specified in the brokerage agreement and in any advertising media, including an MLS system. If the seller is unwilling to enter into a written brokerage agreement, then the broker is prohibited from marketing the property in any manner including the placement of a “Coming Soon” sign.

There is another issue arising from the use of “Coming Soon” sign riders.  Example: a broker places a “For Sale” sign with a “Coming Soon” sign rider on a property and then three weeks later, the broker replaces the “Coming Soon” rider with a “Sold In 2 Days” sign rider.  The use of the “Sold in 2 Days” rider suggests that the property had only been listed for two days.  If this is true, then the broker may have violated the Commission rule by placing the “For Sale” sign on the property before entering into a written brokerage agreement with the seller.

If the broker properly listed the property before putting the “For Sale” sign on the property, then it was a misrepresentation for the broker to put a “Sold in 2 Days” rider on the sign, because the property had been listed for approximately three weeks before a contract was signed. In this scenario, the broker could use a sign rider indicating “Sold In 3 Weeks” or “Sold 2 Days After Available For Showings” (if this is a true statement).

Remember, before you place a “For Sale” or “For Rent” sign on any property, you must first enter into a written brokerage agreement with the property owner. As long as the agreement contains a definite expiration date and the anti-discrimination language specified in the Commission rule, the remaining terms of the agreement are negotiable by the broker and the seller-client. Moreover, as soon as a brokerage agreement expires or is terminated, you must cease all marketing efforts and remove all signs, lock boxes and other marketing materials.

When advertising with signs, newspapers, magazines or digital media (i.e. the MLS system, Web sites, etc.), brokers must exercise care to ensure that the advertising contains accurate information.  While the Commission does not object to the use of sign riders including the “Coming Soon” sign riders, brokers must be careful to use them in a manner which is not misleading and which complies with the Commission’s rules.  Brokers are not eligible to receive compensation from transactions that arise from the improperly established agency relationships.  Don’t put your license or your livelihood in jeopardy by failing to comply with the rules.

This article came from the May 2013-Vol44-1 edition of the bulletin.