There has been a proliferation of the use of “coming soon” or “pocket” listings over the past year. While there may be legitimate reasons for the use of this marketing method, license holders should be aware that selling property using this method, under certain circumstances, may result in a complaint with the Commission and finding that the license holder has violated TREC laws and rules.
Some common characteristics of this practice are: a license holder has a listing on a property and advertises it on a limited basis as “coming soon,” or does not advertise it at all outside of their own brokerage (“pocket listing”); the property is not entered into the local MLS system or other online property listings; the property is not available for general showings or open houses; or the property is not otherwise given full exposure to the market. Although TREC does not restrict how a property can be marketed, license holders must still comply with their required fiduciary duties.
Under Section 531.1 of TREC Rules, a license holder cannot put their self-interest above that of their client. So the motivation for and disclosure of the effect of an off-market listing are key factors that TREC will consider when investigating a “coming soon” listing complaint. If the property is being marketed as “coming soon” because the seller is still preparing the property for sale, that is a legitimate use of this method. If, however, the property is being marketed as “coming soon” so the listing broker can try to acquire a buyer before it is exposed to other agents, then it appears that the listing broker may be putting the broker’s own financial interest ahead of the client’s interest. Unless the listing broker obtained the seller’s informed consent after full disclosure to the seller that limited exposure could result in fewer showings and offers, the listing broker may be in violation of TREC rules and subject to disciplinary action.
To counter this complaint and potential finding, a broker should fully inform the seller as to the potentially negative effect of any limited exposure to the market and obtain the seller’s clear and unambiguous consent – preferably in writing - to the use of any limited exposure marketing method.