Last week, a real estate marketing website announced that they will allow Sellers and their agents to market a property on their site as “coming soon.” The benefit for the marketing website is to have more eyes on their site, which means they can charge more in marketing fees to agents, brokers, advertisers, etc. Some real estate agents are jumping at the opportunity to market their properties using the “coming soon” feature in the hopes of selling the property themselves and earning a larger commission.
I’m all for selling as many of my listings myself as possible but the reality is that in this situation, this is both bad for the Buyer and Seller.
In the Charlotte area, the local board of Realtors® allows agents to market their listings as “coming soon” weeks ahead of the listing hitting the MLS. Agents are to have their client complete a form, have their clients and broker sign, and then forward it to the MLS for compliance. As a result, the agents can post signage, take pictures and otherwise treat the listing as a very public pocket listing. Under the rules, the agent is not allowed to show the listing to anyone until the MLS listing is active or the agent will face fines. Given the number of “coming soon” signs around, I would guess that few are actually following the rules.
So allowing a “coming soon” listing on a real estate website is really no different than a “coming soon” sign in the front yard of a potential listing in many ways. For the Seller, it is a method to attract interest to their home ahead of the home being offered for sale. Where things get dicey is when one of those buyers requests to see the home and wants to make an offer. Technically, the Seller hasn’t had the home properly marketed so what’s to say that there are not other buyers willing to pay more and offer better terms if it were exposed properly? For the Buyer, their negotiating power is limited since the Seller hasn’t marketed the home and may be unwilling to negotiate until the market has weighed in on the property.
Another big loser in all of this is the concept of agency. Agency (representation of Buyers and Sellers) as we know it today was established in the 90’s as multiple listing services changed the landscape of the real estate industry. Prior to that time, most real estate agents worked only for the Seller and all of the agents in that firm were the Seller’s agents. Agency and Cooperation allowed multiple firms to work together to help sell a particular property that is represented by another firm. The concept of aggressively pre-marketing a listing before it is MLS listed is a step back to the days prior to Buyer agency, when it was every Buyer for themselves.
Destroying the current system of agency and cooperation while harming consumers in the process does not seem like a legitimate benefit so that more agents can sell a few more of their own listings.