Stupid Realtor Tricks: Volume 1, The Sold Sign

by Nick Molnar on August 1, 2011

I have a friend who sells used cars. I love talking to him about his work because I don’t know anything about cars and the industry seems to be as distrusted, cobbled together and disjointed as real estate but he does what he can to work honestly and educate his clients. Gap insurance, warranties, blue book? I don’t know much about any of these, but when I need a car, I’ll call him because I trust him. This is educational for me because thinking about buying a car puts me in the same vulnerable and unschooled position from which many of my clients come to me.

And real estate is anything but transparent. Since 2006 when I began working to help people buy and sell homes in South Bend I have been consistently surprised by how convoluted and opaque the home buying / selling process can be.

So I’m working to explode the myths, shine light in the dark corners and generally talk straight about the quirks, embedded bad habits and lack of precise language that confuse the general public and can make buying or selling a home an intimidating process.

My first topic: The “Sold” sign.

Photo of a sold sign on a real estate for sale sign

Few lines are cleaner than the one that separates “sold” from “for sale.” Was there an exchange? Was there payment and delivery? With complicated transactions like real estate sales, there is a half-step where the parties agree on terms, but the sale has not yet occurred…a pending sale.

But pending is not sold. Buyers and sellers agree to contracts that are never completed for any number of reasons: inspections reveal latent defects, buyers fail to qualify for financing, properties fail to appraise for the contract price, and people simply change their mind. Transactions can and do fall apart – that’s why contingencies and earnest money exist.

However it is common for Realtors and developers to say a property is sold before it has. In fact, if you see a “sold” sign, you can safely roll your eyes and consider it misleading, imprecise language. When a house is listed for sale it commonly gets a “for sale” sign planted in the yard. Just before it actually sells, the Realtor who worked for the seller takes it down or the new owner throws it away. But often, after the seller accepts an offer and the sale is pending, the seller’s Realtor will put a “sold” sign in front of the house. The property hasn’t sold, there has been no exchange of cash for keys, and the deal could fail to close for any number of reasons.

There are several reasons someone might put up a Sold sign before it is justified. Realtors look at it as free advertising – a sold sign in front of a house in a neighborhood a Realtor wants more business in is good free advertising. A developer who wants a project to look further along than it is might want to boost the number of  “sold” properties.

But don’t be misled. If you see a sold sign in front of a house, it isn’t. And it’s a relic of a mindset that isn’t scrupulous about ensuring that the image presented to the public is complete and accurate. If you’re buying or selling a home, you can make the choice to work with people who respect your ability to make informed decisions and will answer your questions candidly and with the best data available. Or you can go with the status quo. Shop around… you’ll suffer or succeed based on your decisions.


{ 2 comments… read them below or add one }

Mark November 14, 2011 at 8:29 pm

Heck, I am so superstitious I won’t even put a pending rider on the yard sign once a property goes under contract. Much less a sold sign!

It sounds like you got into this crazy business abiout when I did and it is amazing some of the things you see. Best wishes and keep on shining that light in the dark corners.

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JC July 26, 2012 at 8:14 am

When I bought my beautiful 1905 Queen Anne home on Portage I was disappointed to not have a sold sign. It was my first home and I was looking forward to snapping a photo of the “sold” sign.

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