Multiple offer situations. Loads of them. For more than a year now. The market here in Kingston has changed dramatically - inventory is way down and demand is high. I’ve rattled on about this situation more than once.
It’s changed the way people list houses, the timelines and strategies. When I got into this business a dozen years ago, the broker at the office I worked in said she didn’t like this whole idea of holding back offers, setting a date upon which they would be reviewed. She said that if a house was for sale you should be prepared to sell it immediately. And that made intuitive sense to me. The idea of refusing to look at an offer for a few days seemed somehow arrogant, somehow greedy.
But those were different times. Nowadays it’s reasonable to expect that there will be more than one party wanting to offer on a well-priced listing. And as a seller, and as a realtor, you want to give everyone a fair chance to see the house. So we do it too, we sometimes set an offer date.
What we don’t do, though, is put up Coming Soon signs. You’ve likely seen them in your neighbourhood. Coming Soon to MLS. Or on your Instagram page. On Facebook, between the cat pictures and the garage sale announcements. In recent months it really feels as if more real estate business is conducted on social media pages than it is on MLS sites.
Royal LePage, where I work, doesn’t allow its realtors to use these Coming Soon signs. And at first blush it certainly puts us at a disadvantage because sellers seem to like the idea. And the phone rings off the hook for listing agents. But in my opinion it’s a bad practice, and one that predominantly serves the interests of that listing agent rather than the seller.
Picture this. A Coming Soon sign is planted in the softening lawn out front of a newish house. A few people drive by it on their way to work. They tell some of their friends. Among them are a couple of people looking for a house in that neighbourhood. They look on MLS but can’t find it. Their own realtor can’t find it either. So they snap a picture of the sign and when they get home they give the agent a call. Meanwhile that listing agent has also posted a picture of the house on her Instagram account and on her own website too. She gets all sorts of phone calls from people with questions, and more than a few showing requests. Anticipating this would happen, that agent has already talked to her sellers about letting these people in to see the house. “These buyers will feel special," the agent says. “Maybe they’ll even offer you a ridiculous sum of money.”
And so showings are allowed. Maybe the agent allows a few other agents to get in there too. People from the same brokerage, who heard about the house at the weekly sales meeting. Or friends, other agents they work with regularly. Or others who are just fortunate enough to drive by, or who get calls from their own clients and are able to track it down. It all sounds a bit random, don’t you think?
But next thing you know, the house has an accepted offer on it. Maybe for over the asking price too. The seller is thrilled. “What an agent I’ve got,” he says to all his friends. “You should call her. I can’t believe how quickly she got my place sold!” Lovely.
Thing is, the next day the house is listed on MLS as per the Listing Agreement. And when I call for an appointment, and loads of others do too, we’re alI told that the house is already tied up. This despite the fact that the vast majority of the city’s agents didn’t even know the house was for sale. And most of the anxious buyers out there didn’t know about it either.
Now I don’t know about you, but if I’m selling my house and I’m paying my realtor 4% or so to sell it, I want him or her to flog it to the world, or at least to everyone out there who might be looking for a house like mine. That’s why I signed an MLS listing agreement. And while an early sign might create a buzz, surely that buzz needs to be allowed to deepen into a roar, so that when the listing date arrives, people are pretty much camped outside the front door, chequebooks at the ready and frothing at the mouth. Rabid is the word I was looking for.
And to their great credit, this is the way plenty of agents work it. They plant the sign and then keep the door firmly locked until the MLS listing date. And if it’s a hot property, they set a date a few days further down the road to review offers. It’s the right thing to do, the right way to expose a property to the entire market, and create excitement as well as a level playing field for all buyers and all realtors. But too often these days, I’m being told on the phone that a house has been essentially sold before most of us even know about it. And come on, its not brain surgery; that practice doesn’t serve a seller’s best interests at all, no matter how exciting a fast offer might feel.
Think about it for a second. You can’t on the one hand tell sellers that they shouldn’t look at offers on the first day, that they need to wait, but then convince another client to sell their house before it’s even MLS-listed. Those two strategies don’t sit well together. In fact, you leave them alone in a room and they’ll beat the crap out of each other.