One tactic used by real estate brokers to advertise to consumers is through the use of “Coming Soon” signs, which advertise property that will be coming on the market. In order to appropriately use “Coming Soon” signs, you must have the appropriate authorization, as such signs serve as both notice of sale and an advertisement. Similarly to pocket listings, there are good reasons to use a “Coming Soon” listing: people may need to prepare their homes for sale or are waiting for their new homes to be completed. And also similarly to pocket listings, these listings create ambiguous ethical issues. 

“Coming Soon” listings inform the widest possible audience that the house, while not ready to be seen, is for sale and will be ready for viewings on a specific date. If a seller has not signed a listing contract, the house cannot go into the MLS. This means that a broker can show the house to their own list of potential buyers without consequences. It also means the house receives limited exposure, which could lead to less lucrative offers. Listing a home on the MLS is generally viewed as the best way to inform the vast majority of potential buyers of availability, and if a client seeks to sell their home for the greatest possible price, such interest may be jeopardized by the use of “Coming Soon” signs. This can place a broker in direct conflict with the ethical duty to promote and protect the best interests of the client.

While not an illegal way to sell a home, it does place the broker in a precarious position that skirts ethical and legal boundaries. Failure to be fully transparent about the pros and cons of using a “Coming Soon” listing to a client could result in perceived unethical conduct, putting the broker’s license at risk for disciplinary action being taken by the Illinois Department of Financial and Professional Regulation. If you find yourself facing potential disciplinary action, Williams & Nickl has successfully defended the licenses of hundreds of real estate brokers before the IDFPR.

A pocket listing refers to any property a real estate broker holds a signed contract with but does not advertise on a multiple listing system (“MLS”). While pocket listings have a somewhat negative reputation, there are many reasons why a broker and seller might prefer this method to the traditional listing: the property might not be ready to show, the seller might be subject to a listing agreement to only show to qualified buyers, or brokers strategically use pocket listings to increase an aura of exclusivity related to the home. While these are legitimate reasons, brokers would take care to exercise caution when using pocket listings to avoid any perceived unethical conduct.

If you choose to do a pocket listing, it must be in the best interests of the client. Realtors are ethically required to promote and protect their clients, which means a motivation to undertake pocket listings solely because it could result in a higher commission will raise red flags. In recommending a pocket listing to a client, the broker must thoroughly discuss the pros and cons with the seller and ensure the seller understands the benefits that are being waived by not showing the property on the MLS. By not listing on the MLS, the broker decreases marketing opportunities to reach a larger audience of potential buyers, and what is probably most relevant to the seller, may not bring in the highest possible price for the property. Because a broker is both legally and ethically required to act with the seller’s best interest in mind, a seller seeking the most money with the best terms must be fully informed before pursuing a pocket listing.

Pocket listings are not illegal, but they are viewed as an ethically grey area in the real estate business. In deciding to undertake a pocket listing, a broker must take extra steps to ensure the client’s best interests are being met. If a client ultimately feels like the broker did not receive ethical and adequate representation, a broker could face disciplinary action against their license by the Illinois Department of Financial and Professional Regulation. Williams & Nickl has considerable experience representing real estate brokers and defending their licenses before the IDFPR. If any troubles arise, please contact us for efficient and effective representation.

Recently, the housing market has seen an increase in business due to low-interest rates and rising prices. With the increase in business comes more juggling of clients and listings. Because real estate brokers have a duty to act in the best interest of their clients, they are held to higher standards than most. To ensure your conduct is viewed as honest and ethical, keep these considerations in mind:

Advertising and Social Media

Under the NAR Code of Ethics and Standards of Practice, social media is treated as a form of marketing, despite the difficult task of separating the professional and the personal. Because of this, anything you post on a social media account, such as Facebook, Twitter, or Instagram, must be accurate to the best of your knowledge. Any descriptions you make about a property must be accurate, so you should avoid any exaggerations or misrepresentations. Remember to clearly disclose your agency status and professional affiliation. This can be achieved by including the name of your firm in any posts you make.

Proper Property Disclosures

One of the most prominent complaints made by customers relates to improper property disclosures. It is a legal and ethical requirement that real estate brokers disclose all known material facts about a property to interested clients and failure to disclose could land a broker in serious trouble. While you are not obligated to know about latent defects or matters outside the scope of your license, it would be smart to direct your client to an appropriate source. Be sure to disclose all important information affecting the desirability or value of the property being shown.

Due to historically low-interest rates, the housing market has witnessed a boom in business. With this increase in business, it raises possible ethical considerations faced by real estate brokers as they strive to enjoy the strong market. What steps can you take to ensure you remain in good ethical standing?

Presentation of Multiple Offers

Because of the low interest rates and rising prices, it is not uncommon for multiple offers to be made. In handling such offers, it is important to take certain steps to ensure fair dealing. For any offers received, present them as quickly and objectively as possible. If any buyer or fellow broker asks for information regarding any of the offers you have received, remember that you can only disclose the existence of such offers, along with their source, with express approval provided by the seller. Additionally, if you have authorization via a signed agreement to act as the buyer’s representative, you have to make sure the buyer is aware that the seller does not have to treat any offer as confidential, unless required to do so by law, regulation, or agreement.

Prevent Unauthorized Access

In order to avoid violating any terms and conditions a seller has for viewing their property, it is important to be present when a client wants to look at a home and ensure the viewing occurs within the appropriate time window. Never provide a client with unnecessary access to the home, meaning the client should never have a key to the home, the combination of a lockbox, or use of a lockbox key.

An ever-present war has been raging between Zillow and real estate brokers. Zillow believes it filled a gap where NAR failed to provide valuable services for online consumers. Real estate brokers believe Zillow steals listing information from MLS agreements, repackages the information, and then sells the information back to real estate agents who owned it in the first place.

In 2015, upon the merger of Zillow and Trulia into one big company, Zillow Group, the war between brokers and Zillow escalated. And now, the war seems to be entering an escalated phase once again. For several years, Zillow has worked to transition into a buying-and-selling entity, offering iBuying services through Zillow Offers, and mortgage, title, and escrow services through Zillow Home Loans. Taking things a step further, Zillow has now started its own licensed brokerage: Zillow Homes.

Starting in January 2021, Zillow Offers customers in Atlanta, Tucson, and Phoenix will be able to work directly with licensed employees of Zillow Homes. Zillow Homes plans to expand into additional markets later in 2021. Zillow Homes will be licensing existing Zillow employees under the entity, rather than recruiting agents from any other companies. With this move, Zillow will be free to pull directly from the MLS Internet Data Exchange, which it believes will allow Zillow to more efficiently serve mutual customers with MLS partners. Zillow has also announced plans to join local real estate associations, including NAR.