Last week I mentioned the problems with agents selling houses before inputting their listing onto the MLS (link here). Agents are so accustomed to doing it that there isn’t much hope it will change, at least not until an outsider puts an end to it (district attorney or disrupter).
The listings that are first exposed as ‘Coming Soon’ suffer a similar fate.
Zillow has legitimized the practice with their whole-hearted endorsement, yet the listings are vague and unclear, except for the On Market date. But even that doesn’t have any rules, and agents regularly ignore their own declaration and never put them on the open market at all (probably because they found a buyer from their Coming Soon campaign), or delay for a few extra days in hopes of a big pay off.
For these agents, the MLS-input is a last resort.
Rarely do the listing agents who offer a property as ‘coming-soon’ have a specific strategy, and they tend to be vague about showings and offers.
What can be done?
If the ‘Coming Soon’ had more parameters, it would help. Rather than just a future on-market date, let’s add two other questions:
1) Are you showing the home before the on-market date?
2) Are you entertaining offers before the on-market date?
Just those two questions would not only give buyers and their agents direction on what to expect, but also it would create some accountability. Because there are no rules currently, it’s anything goes, which isn’t good for buyers or sellers.
Are there clues for detecting the listing agents who do this stuff? The trail of evidence starts with their photos of the front exteriors of their listings – it is against the MLS rules to include a photo with your for-sale sign, so those who insist get their sign fuzzed out by the MLS police:
Obviously, the photo-taking happens before MLS-input, so if they already have the sign in the yard for their photo, you know they have been shopping for buyers for days, if not weeks, prior to MLS-input.
But most agents are happy to tell you that they will not only conduct a ‘Coming-Soon’ campaign, but they also have a their database of ready buyers, and an office full of productive agents who have their buyers too – all of which will be exhausted before they put your home on the MLS.
What is best for the sellers – and buyers too – is for everyone to engage at the same time, via the MLS, for maximum urgency.
Expect ‘immediate blowback’ from brokers:
We learned at NAR’s Midyear 2018 that the proliferation of pocket listings is on the radar of the Department of Justice (DOJ) and the Federal Trade Commission (FCC) — this could be music to the ears of multiple listing systems and Realtors concerned with the integrity of the multiple listing service (MLS) model.
Pocket listings, or “off-market listings” as they are now known, will reportedly be on the table at the upcoming joint workshop on real estate competition sponsored by the DOJ and the FTC.
Pocket listings violate the spirit, if not the letter, of the Realtor Code of Ethics.
“As a general practice, actively discouraging the submission of listings to MLSs is inconsistent with the fundamental cooperative nature of the MLS and the obligations of the Code of Ethics,” NAR General Counsel Katie Johnson stated, in a video on the NAR site.
As long as listing brokers get the approval of their customers, the Code is powerless to stop off-market listings.
As recently as March, the Real Estate Board of New York (REBNY) tried unsuccessfully to curb “whisper listings,” a Big Apple version of pocket listings. According to The Real Deal, the proposal “elicited immediate blowback from many of the city’s largest residential firms, prompting the board to scrap its plan.”
In spite of the disapproval of Realtor leaders, in Southern California, the Bay Area and other major markets, off-market marketing today is an established and popular practice. Pocket listings may account for as much as 18.9 percent of homes for sale and 61.9 percent of all listings over $4 million in the Los Angeles market.
My mailbox is getting tee pee’ed every day by local brokers, as well as phone calls from brokers with clients “very interested” in making an offer. I’m serendipitously located in a burgeoning hipster corridor. A big wave of them are hitting my area, so it seems silly to me to consider selling anything now.
Hipsters and their co-signing parents are squeezed by rich folks willing to pay stupid rents, rather than buy, on one end, and immigrants willing to stuff two families in a two bedroom apt on the cheaper end.
“New construction” is a tragicomic sh*tshow overseen by qualified moron city council members who take a “fact finding trip” to Scandinavia on the taxpayers dime, and come back with a bunch of stupid infrastructure ideas involving rental bikes, “community gardens,” bee-keeping, backyard goat keeping, and roundabouts.
Conclusion: Whomever owns decent property within 15 blocks of a beach, especially rentals, should relax with their mimosa’s. We’re surrounded by mental patients, and they’ll never settle down. Every asinine move they make will increase prices.
The fight is on:
Good morning friends,
I’m writing you today because Zillow is increasingly compromising our industry and damaging our community. They’re not just satisfied with taking your information and selling it back to your highest bidding competitor, now with their instant offer program they want to cut you out of the deal altogether.
Read about it here: https://therealdeal.com/2018/04/16/zillows-new-initiative-could-change-what-it-means-to-be-a-broker-are-brokers-worried/
Couple this with the recent influx of discount brokerages, there has never been a more opportune time (or greater need) for agents to find a way to maintain their exclusivity and value.
So here’s what I am suggesting:
As agents, if we are to remain relevant we have to be able to add value and provide our clients with information that they do not have access to. Even with the MLS passing on our listing information we still have a huge advantage over Zillow that we have not yet fully leveraged. Of course I am talking to off-market inventory. More and more ‘sellers’ are wanting to adopt an off-market strategy and our ‘buyer’ clients will always want to know about exclusive ‘pocket’ listings. So let’s leverage our access to this private marketplace and give ourselves a competitive edge while at the same time protecting ourselves against what’s coming. As a PLS member, you’ve already taken the first step.
Now the plan:
We’re asking all of our PLS members to stand up, join hands (kumbaya), and fight back by helping to grow our ranks. It’s a simple proposition: More PLS members means more inventory at your fingertips for your buyers and a stronger private marketplace to offer your sellers. As our membership grows, the agent community becomes more powerful.
Inviting other agents in your network to join ThePLS.com is now super easy and we’ve even incentivized it – if you need a little extra incentive 😉 .
Just go to ThePLS.com/refer-a-friend/ and enter the emails of the agents you’d like to invite. For every agent that joins you’ll earn a free month of membership and so will they. Invite 25 new members in the next 7 days and you’ll earn a lifetime free membership! Your ‘earned’ months will be waiting for you when we transition to a paid $19.99/mo subscription (we can’t run it for free forever ya know!). And don’t worry, your account is still free until this happens – likely sometime in the coming months.
This promo ends Sunday, June 10th at 11:59 pm.