The real estate industry suffers from constrained inventory, forcing brokers to get creative in order to address the needs and expectations of home buyers who are working with a company agent. Two leading firms have created solutions that are interesting, and potentially long lasting.
Neither of these firms have pocket listing programs, which is an important distinction. A pocket listing, or properties sold by brokers without ever entering an MLS, pose a problem for the real estate industry. Frankly, pocket listings are bad for sellers who sacrifice highest possible price for their home because of limited exposure. There are numerous other issues that poison the pocket listing practice in real estate. Most importantly, pocket listings typically result in lower selling price because they are not exposed to the market, are against the rules of MLS participation, and often generate conflicts of interest that cause liability for the broker.
Coming Soon programs are designed to sit somewhere between the pocket listing and MLS listing. These programs allow the brokerage to inform agents and consumers of properties which are on the path to be made available for sale through the MLS. Consumers and agents can access these Coming Soon listings on the brokerage website in full transparency.
Coming Soon listings are compliant with MLS rules and regulations. Brokerages normally have 48 hours to enter a listing according to the most common adoption of NAR’s MLS Policy. This allows the brokerage to let buyers working with a firm’s agent to know about a listing before it goes into the MLS. The goal is to put the listing into the MLS, but in the case of Howard Hanna who is running a pilot in Ohio, that does not always happen. Howard Hanna sold 55 homes the first month they offered the Find it First™ program.
Here are some new ideas to make Coming Soon beneficial:
Expose the Listing
Both of these firms have significant market share and web presence – often more than 1/3 of the trades in a region that they serve. HowardHanna.com is also a major regional powerhouse.
Offer of Compensation
Howard Hanna and Compass offer compensation if another firm brings a buyer for Coming Soon.
Win the Property Alert Battle with Coming Soon
One element of Coming Soon programs that makes a big difference: property alerts. If you do not have a Coming Soon program in your brokerage, then buyers could potentially get notified of your new company listing faster from your competitors than they do from you.
Imagine a consumer who is working with a Compass agent to find a home. With IDX systems from the MLS, it is possible for the Compass customer to get an email alert from a portal or competitor before getting the listing from their Compass agent. That is a horrible circumstance for the Compass agent. Coming Soon fixes this. It allows customers who have their search saved to a Compass or Howard Hanna website to send those listing alerts 48 hours before any of their competitors, which would be expected from a buyer working with an agent from the listing brokerage.
Get a Head Start on Search Engine Optimization
The big national portals tend to dominate search engine optimization for property addresses. They built their systems to be parcel centric, so the addresses of every property in America are already indexed by search engines before the listing even exists. Just Google search an off-market address and you will see this observation illustrated. Other than Redfin or Movoto, you do not see any brokerages prominently indexing addresses before they go in the MLS. Coming Soon listings do not necessarily allow you to catch up with portals on SEO, but they will allow your site to index your full listing before it goes out through IDX or listing syndication. For big sites like HowardHanna.com, this creates a significant advantage. According to Hitwise, HowardHanna.com has the same or greater amount of consumer web traffic in the communities where they have commanding market share.
Coming Soon Delivers A Unique Reason to Buy with Howard Hanna or Compass Agent
Brokerages are constantly looking for ways to offer homebuyers a unique proposition that tips the scales by allowing agents to secure new customers. Large firms have a huge advantage here. They can promote their website as a place where home buyers can register to get a heads up on new listings before they hit the market (aka, MLS). Howard Hanna built a nice page for Find it First™, you can view it here https://www.howardhanna.com/finditfirst
For Compass, Coming Soon is a little differently positioned. Compass has launched a program to provide Compass Concierge service for staging and renovation before the home is listed. A Compass agent sits down with the seller to determine the work that will improve the marketability of the property. These can range from roof replacements to painting a mailbox. Compass pays the costs and collects payment for the services at the time of closing. https://www.compass.com/concierge/
Obviously, Compass Concierge could require a property to be held back from the Multiple Listing Service for longer than the MLS’s standard 48 hours. In this case, Compass memorializes this in the listing agreement to adhere with MLS rules and regulations. The residual effect of Compass Concierge that there are many more listings in the Coming Soon pipeline for Compass buyers to look at, generating even more reason for consumers to visit Compass.com.
We see Coming Soon as a great recruiting tool for both of these firms.
The design of Coming Soon programs at Howard Hanna and Compass are not intended to undermine the multiple listing service. Where local MLSs have Coming Soon programs, both of these firms seek to enter their Coming Soon inventory. Unfortunately, there are only a few dozen of the 640 MLSs in America who offer a Coming Soon option to brokers.
Another MLS consideration is recording a comparable sale. Some MLSs allow brokers to enter a comparable sale listing even if the listing sold before it went live in the MLS. There are two ways to fix this. One is to allow comparable listings to be entered. The other is to have public record data available for CMA programs. There is nothing more embarrassing on a listing appointment than missing the home next door that sold pre-MLS in the last 30 days.
WAV Group does agree that Coming Soon could undermine the effectiveness of the Multiple Listing Service if MLSs do not develop programs to support them. Our industry did a great job of discouraging pocket listings. We need to exert the same effort to support Coming Soon listings and make sure that data gets to the MLS even if it trades before becoming Active.
Competition in real estate is fierce. These firms are innovating. They are not alone. We mention them because they are communicating these programs to consumers and to the industry with great effectiveness. It’s one thing to have a program, it’s entirely different when you market it so well that everyone knows about it. Kudos to both firms for their marketing and communication prowess.
Also, shout out to the Council of MLS who has offered so much guidance to MLSs who are struggling to find the right way to handle Coming Soon statuses. The leadership in sharing best practices has done so much to keep our MLSs focused on meeting the needs of the marketplace.
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Frankly, the whole “Coming Soon” idea is a throwback to the 1950’s prior to MLS, to force other agents and clients to deal with the listing company only. This is bad for the industry, and is exactly why the MLS was invented in the first place. Not a fan. I can see this being abused easily as just another name for Pocket Listings.
Value of this type of program depends on your perspective. Hard to see a downside for buyers. Who doesn’t want early notice of availability, particularly in today’s red hot market? There can be some benefit for home sellers as well, but possibly at the risk of not getting top price, and there is potential for abuse. Sellers must trust their agent to be sure they aren’t leaving money on the table. Listing agent (agent for the seller) must make it very clear to the seller that full exposure of the property through the MLS is the best way to get the top price. Sellers should use the “Coming Soon” platform to generate excitement for their property but then make sure they get the maximum exposure offered by the MLS before settling on a price. Otherwise the seller may never know if there was a buyer out there willing to pay more.
so is this the best interest in the brokerage to get both ends of the deal, what about if it was just put on the market and maybe that seller would get multiple offers? I hate the coming soon listings as “the back door was left open by mistake” happens as not all agents are honest. Coming soon was not suppose to be used as a marketing tool it was to be for sellers who were not quite ready.
This is continuing an ongoing disaster. Soon agencies will just withdraw from MLS groups and their state and national associations to keep it all for themselves. Gussy it up as much as you like, this is a way to not share listings – which is against MLS models. Shame on the big guys who have ruined our industry. This is not innovative. I question if it’s a restrain of the trade as defined in their explanation above. Will the sellers feel that they had enough time on an open market when this is made to keep the sale in house. Shame. It’s only a matter of time and our industry will clearly be a thing of the past.