“Delayed showings,” “coming soon,” “multiple offers”…phone calls on these topics are among the most commonly received questions and complaints by Columbus REALTORS® these days. Questions and complaints come not only from REALTORS® but from the public, and all too often result in Professional Standards Hearing Panel “invitations.”
“Delayed showing” (actively for sale, but entry to the property denied at this time) allows a property to be published in MLS as an active listing with a specified predetermined date on which showings will begin. It is ideal to “delay showing” if the property seller would like a little additional time to prepare the property for showing but wants to go ahead and list the home.
The “delayed showing date” may not exceed 30 days from the date of signing the listing agreement. During the waiting period, the MLS listing is visible to all members of the MLS, and third-party web sites can receive listing information from the MLS.
However, “delayed showing” status does not allow any showings of any kind before the published showing start date – not to another agent, a potential buyer, a company tour or an open house. To do so would certainly violate MLS policy, but did you know it might also be an Ethics violation?
Some agents use the “coming soon sign” in conjunction with a “delayed showing” and others use it to announce that a property is soon to be listed. Therefore, there is some confusion among members of the public and among REALTORS® as to what exactly the sign means.
For example, how is it that sometimes a property that was “coming soon” or listed as a “delayed showing” is suddenly “under contract,” without REALTORS® having the opportunity to show the house? It is possible that a “curb offer” (offer from buyer who has not seen the inside of the house) was accepted, with or without contingencies, immediately upon the property’s release from “coming soon” status.
Or it may be the seller allowed the listing agent/office an “exclusive opportunity” to show the property for a period of time, keeping it out of the MLS. An “Office Exclusive-Waiver Form,” delivered to MLS within 48 hours of signing the listing agreement directs the listing agent to withhold the listing from MLS and third-party web sites while the listing office or agent seeks a ready, willing, and able buyer for the property without the property appearing in the MLS.
While there are good reasons for utilizing the “delayed showing” status, “coming soon” sign, or “Office Exclusive Waiver Form,” improper use of any of these could violate MLS regulations or Ohio licensing law. It could also violate the NAR Code of Ethics.
Article 1 requires REALTORS® to treat all parties honestly and protect and promote the interest of the client. Article 3 requires cooperation with other brokers except if not in the client’s best interest – Standard of Practice 3-8 requires REALTORS® not to misrepresent the availability of access to show or inspect a listed property. Obviously, to allow some buyers to view the property when the listing states that no one may see the property until x date, violates Article 3.
Article 10 states that REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation or gender identity. REALTORS® are not to be parties to any plan or agreement to discriminate against a person or persons on basis of any of the afore-mentioned.
Additionally, non-adherence to the requirements of a “delayed showing” could violate the federal Fair Housing Act, opening the sales agent, broker and client to civil penalties from $16,000 to $65,000, and in cases in which the Justice Department is involved these penalties can go up to $100,000. Punitive damages may also be awarded by federal courts, and attorney’s fees are generally paid by the non-prevailing party.
Violating these rules would certainly not “protect and promote” a client’s interest! Therefore, caution is strongly advised when implementing any of the above strategies.
“Multiple offers” is yet another challenging “new normal” REALTORS® are learning to manage in many communities across central Ohio. It is not rare for a REALTOR® to receive 18 offers after 20 showings on the first active day of a new listing! Here are a few tips to consider when finding yourself on the buying or selling side of this equation.
Best Practices for Listing Agents:
- Establish a game plan with the seller before making listing active. While developing lots of interest is beneficial to the seller, managing multiple buyers’ interest and multiple offers is challenging.
- With permission of seller, consider communicating seller’s most important considerations in the “agent to agent remarks” section of the MLS listing, i.e.: possession, earnest money, time for closing/possession, etc.
- Make yourself available to field calls/texts/emails from buyer agents.
- Communicate with all interested parties so that everyone feels the playing field was even.
- Disclose and publish in the MLS any Variable Rate Commission situations that may exist.
- Establish with seller a system for comparing offers that is objective and consistent, and based on the most important needs of the seller.
- Discuss in advance whether seller will accept personal letters with offers to buy and get directions on handling them. While many buyers enjoy receiving personal letters and many sellers believe personal letters can make or break an offer, personal letters have become topics of claims of civil rights/fair housing violations and could potentially have serious repercussions for listing agent, listing broker and seller. Consider communicating your own policy on such letters in your listing presentation.
- Present all offers as soon as possible after they are delivered.
- Have a system in place for notifying all interested parties once seller has decided on “winning bidder(s).”
- Consider negotiating back-up contracts. This highly pressurized market has resulted in some buyers making quick decisions that they later regret or are unable to perform.
Best Practices for Buyer’s agents:
- Time is of the essence.
- Sellers may establish a deadline for “highest and best” offers, but if an offer they can’t refuse comes in before the deadline your buyer may end up missing the opportunity to compete unless they, also, proffer their best offer!
- All details matter – preapproval letter, timeline for inspections/remedy, home warranty, earnest money, closing/possession. Ask listing agent what’s important to seller. Tailor the offer to address those issues!
- Mentally preparing your buyers for a highly competitive marketplace is crucial. Help them understand that quick action when they find the right property, cash offers, waiving inspections/remedy, waiving appraisal contingency, non-refundable earnest money deposits, and fast closings/extended closing/possession, can all be keys to getting their offer accepted. This market is for serious buyers!!!
Most cases that come before the Grievance Committee and Professional Standards hearing panels stem from poor communication or lack of communication with clients and other members of the transaction. Know your Code, be sure you understand new processes before you use them, and communicate!
“Delayed showing,” “coming soon” and “multiple offers” are just the latest developments in an industry that guarantees to keep REALTORS® on their toes.
As chair of the Professional Standards Committee, I would be delighted if we had no hearings to convene and no “invitations” to deliver. A Professional Standards hearing is truly not a fun party to attend.