“Coming Soon,” a new tool that allows real estate agents and brokers to post pocket listings, was revealed in early June, and everyone involved with real estate has an opinion on the matter — notably, MLSs and industry organizations and insiders.
Many MLSs have already panned the new tool, claiming that sellers lose out on the ability to widely market their homes and potentially receive better offers. Some of them, though, have posited that this is simply the direction the listings market was bound to take … and if fellow MLSs don’t catch up, their days could be numbered.
Agents, meanwhile, may differ in opinion on the service as well. On the one hand, agents with clients ready to list their properties have the opportunity to gauge early interest with Coming Soon and swiftly accept what they deem to be the ‘right’ offer from a buyer they, or a brokerage colleague, represent. On the other hand, accepting a quick offer early that’s thought to be “good” prevents sellers from seeing potentially better offers on the market, which may lead to some ethical questions for agents who represent both sides of a deal or who rush a transaction.
Views on this matter will continue to evolve and vary over time, but there’s already been plenty of discussion on Coming Soon. Read up and form your own opinion with these posts:
Some Positive, Ambivalent Reaction to Coming Soon
The always-enjoyable Rob Hahn delved into what exactly MLSs are up in arms about, given that a fair share of real estate transactions today don’t involve their use. Despite his relatively mixed review of the new feature, he feels some brokers will want to take advantage of it to reap the benefits of dual agency — something he notes many involved in the industry frown upon, yet really do nothing to stop:
- “[D]ouble sides — meaning broker dual agency, or designated agency, not individual dual agency — is what every single broker and agent team leader in America wants. If those are truly evil, then shouldn’t real estate follow lawyers and simply prohibit broker dual agency or designated agency, and force firms to refer business out to their competitors? (Without the 25% referral fee, of course, since that would taint the loyalty of the buy-side brokerage.)”
Meanwhile, those who work with MLSs closely, like data and tech firm FBS, noted they’re not terribly concerned with Coming Soon and similar features. As FBS President and CEO Michael Wurzer stated, if brokers were going to ditch MLSs entirely in favor of a pocket listings platform to gain an edge on competitors, it would’ve happened already:
- “If broker competitors were going to cooperate en masse with a portal, why hasn’t it happened yet with all the opportunities presented? Zillow long ago abandoned its mission to disintermediate brokers and agents as the market also made it clear that brokers and agents add value. Enough value, apparently, that Zillow and Trulia can be valued in the billions of dollars on the basis of revenue from brokers and agents. Those same market forces and competition will result in brokers doing their own thing, with the result being a lack of critical mass anywhere — except the MLS.”
“Ideas won’t keep. Something must be done about them.”
— ALFRED NORTH WHITEHEAD
Niche real estate groups have also chimed in with their two cents on Coming Soon. WAV Group Consulting indicated in a recent blog post it was just a matter of time for pocket listings to become more prevalent, and that MLSs may need to adopt their own to keep up with the likes of Zillow:
- “There is little doubt that MLSs will be upset by this strategy from Zillow. Some may choose to educate their members on the challenges of pre-marketing listings. However, it may be in the best interest of the MLS to configure coming soon fields right away. This would allow the MLS to remain the central and authoritative feed source. This may also help resolve many of the Off MLS listing issues that have plagued some markets that are super short on inventory. It is better to be part of program than a critic who shouts from the bleachers.”
Negative Views from NAR, Consumer Advocacy Group
While bloggers and other real estate minds have had mixed views on Coming Soon, big-time real estate and consumer organizations have had plenty to say on the pocket listings tool as well. For instance, the National Association of Realtors® (NAR) put out a measured note (a warning, really) to its members in its release following the unveiling of the new feature. Its message was simple, but serious:
- “A broker’s decision to market a seller’s property as ‘coming soon’ must always be made based on the client’s informed determination of what best serves the client’s interests. … Failing to act in the client’s best interest and failing to disclose the pros and cons of a limited marketing plan, such as ‘coming soon’ advertising, can violate state real estate license laws and regulations, MLS policies, and the Realtor Code of Ethics.”
Those words, from NAR Senior Vice President and General Counsel Katherine Johnson, seem to indicate just how cautious agents and brokers need to be in their relationships with sellers and how they promote those sellers’ properties. NAR seems to be siding with the majority of MLSs that oppose the feature, noting the best way to get the best price for homes on the market is to increase a listing’s exposure.
NAR wasn’t the only major group to show its displeasure with Zillow’s move, though. Consumer advocacy groups have also spoken up, including Consumer Advocates in American Real Estate (CAARE), which stated:
- “CAARE does not support Zillow’s entry into the pocket listing ‘marketplace.’ We believe that by helping brokers advertise these pre-MLS listings, Zillow is perpetuating a harmful practice that thrives on breaching trust, deceiving clients and intentionally putting them in a situation of duress and then profiting from it. This pseudo-illegal conduct does not reconcile with Zillow’s mission of transparency.”
Specifically, CAARE noted it doesn’t believe agents and brokers who use Coming Soon have their clients’ best interests in mind, as they put sellers in the “undesirable situation of either accepting an offer generated by a semi-closed marketplace or rejecting that offer and putting the house on the MLS.”
Coming Soon’s Fate and Effects? To Be Determined
How often and widespread Coming Soon will be used by the real estate community in the months ahead remains to be seen. One thing that’s certain, though, is that many MLSs will likely try to take a firm stand against the pocket listing feature — much like one in Seattle has. The Northwest MLS has instituted rules that prevent agents and brokers who list with them to put future listings on the market elsewhere online. However, this hasn’t stopped agents in other areas of the country from using similar features.
As Real Estate Economy Watch indicated, Realtors throughout the U.S. have taken advantage of pocket listings, including some in California:
- “The San Francisco Association of Realtors started a ‘coming soon’ section in the MLS in 2013 … Last January, SFAR started to promote the service. Participation has risen steadily and, through May, some 138 properties were pre-listed, equal to more than a quarter of the MLSs total current inventory of 503 listings.”
Other areas of the country may steer clear of Coming Soon simply for the ambiguity of rules regarding pocket listings. Indiana, for instance, is one state where brokers can be fined for posting listings too early. A brokerage in the state told Inman News that brokers who use Coming Soon would be in violation of local licensing laws:
- “F.C. Tucker Co., on Tuesday warned its 1,500-plus agents that participating in Zillow’s Coming Soon feature would result in a violation of Indiana licensing law and is subject to fines of $600.”
The possibility of fines should be more than enough to steer agents and brokers away from Coming Soon. In other areas of the country, that may not be the case, though. Brian Boero at 1000watt has an optimistic outlook for Coming Soon (more so than many other real estate pundits).
Boero notes brokers want to have a firmer grasp on the marketing of their properties and argues that MLSs will also eventually buy into the pocket listings phenomenon, remarking that to do anything else would be to deny the evolution of the industry:
- “So much of the energy in our industry right now feels retrograde to me. People trying to push the world back ‘round to yesterday. I know some, though, who are moving ahead amongst the uncertainty, complexity, and fear. These are the brokerages, agents (and MLSs) that will take note of the news from Zillow this week and move on, forward.”
With Zillow’s new feature and others like it that could potentially pop up on other listings sites (Redfin, for instance, has also made a similar feature public that shows buyers which homes are likely to sell fast), it will be interesting to see how the real estate community reacts and adjusts.
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