Home sales have been charting upward as the market rebounds – but “sold” signs have been trending down. “Sold” sign sightings have all but dropped off the charts.
Where did they go?
“Sold” signs have become casualties of North Carolina’s “due diligence” law, which took effect in 2011. “Yes, indeed,” said veteran Charlotte Realtor Dan Cottingham, when I called to confirm that. “And you do see “under contract” for less time, too.”
In a nutshell, the law gives prospective buyers a period after they sign the purchase contract to get the home inspected and check out anything else. Buyers pay a small fee, which is negotiated with the seller along with the length of the period. At the end of due diligence, the buyers can back out for any reason.
The period can vary from a couple of weeks to more than a month.
Cottingham, partner in CottinghamChalkHayes, said the state licensing commission “heavily suggests” that brokers not slap on “sold” signs during the due diligence period.
“When it closes, then you can put up a “sold” sign,” he said.
Of course, then it’s time for the sales sign to come down.
What about “under contract” during the due diligence period? That’s an accurate label. There are reasons we notice fewer of those, too. One important reason is that many sellers want to continue showing their homes during the period, since potential buyers can back out for any reason.
There’s a stretch of time between the end of due diligence and closing, but everybody involved wants that to be as brief as possible.
So, the rest of us see fewer “sold” signs.
It’s easy to understand why an agent would want to display a “sold” sign as soon as possible. It’s strong marketing for the salesperson and the sales company. It announces, “Hey, we successfully sold this house, and we can help you sell yours!”
True, said Cottingham. But the absence of “sold” signs hurts marketing only a little and, besides, everybody is playing by the same rules so there’s no advantage for one agency over another.
It’s also easy to understand why the rest of us notice that “sold” signs aren’t nearly as common as they were before the due diligence law.
Lots of “for sale” signs can be negative – but “sold” signs are hugely positive.
When a “sold” sign goes up on your street, you feel better – even when it’s not in front of your home. There’s a psychological boost for everybody on the street and in the neighborhood. “Sold” signs confirm that the neighborhood is healthy and vibrant, that newcomers want to live there.
“Bingo!” said Cottingham.
Allen Norwood: firstname.lastname@example.org