“Coming Soon” Listings: Smart Marketing Strategy or Harmful Gimmick?
It’s the end of the month when you receive notice that your tenant will be moving out in 30 to 60 days (as your lease contract requires). Do you begin advertising immediately or do you wait?
While realtors and landlords puzzle this, Zillow has answered by turning to the movie-industry for inspiration, with "Coming Soon" listings. In Summer 2014, Zillow announced in a press release that it will be adding "Coming Soon" listings to its repertoire of homes for sale. The new feature allows Zillow Premier Agents and local multiple-listing services (MLS's) to market their listings up to 30 days prior to inputting them into the MLS. Many realtors are in an uproar over this new marketing strategy and some say it will hurt sellers in the long run. Zillow disagrees. Jeremy Wacksman, Zillow’s Vice President of Marketing and Product Management, says, “Zillow is committed to giving buyers access to inventory that was previously hard to find, so they can make better decisions. By offering a glimpse into a market's future housing inventory, home shoppers can rest assured they have the broadest possible view of the local market to find the right home, and sellers can feel confident their home is being marketed as widely as possible."
"Coming soon" is certainly not a new phenomenon as scores of investors and realtors have practiced this for years, albeit in the more traditional way. Investors are accustomed to putting the word out in their local communities and to other investors about a home they just purchased and were preparing to sell or rent. Realtors would often get the word out to their colleagues and inner circle about a new listing that was pending seller’s signature or awaiting final touches by the seller. So what’s the hype all about now?
Primarily the concern is that Zillow is once again sticking its nose where realtors feel it doesn’t belong and interrupting the way they do business. Some agents feel these listings will limit the sheer numbers of potential buyers who will be exposed to them, and increase the chances for listing agents to "double dip" (act as dual agents by representing both seller and buyer). Another realtor concern is that these prelistings could also inadvertently encourage more FSBO (For Sale By Owner) listings, and generally lower the standards realtors claim they work so hard to maintain.
Some MLS's have gone so far as to ban premarket listings, in an effort to protect their hold on the home sales market. As often happens with disruptive innovation though, the entrenched players trying to protect the status quo may end up merely alienating consumers, who want what is best for themselves, not what puts the most money in agents' pockets or protects the National Association of Realtors.
According to a recent Inman report, Zillow’s Chief Revenue officer, Greg Schwartz had this to say about pre-MLS listings, “the feature allows listings to land on the MLS with a ton of velocity with buyers dreaming home-specific dreams and ready with pre-approval letters from lenders.” Schwartz reportedly added, “[we] frequently see listings posted to [our] site before they hit the MLS, and this feature puts a framework around [that practice].”
The question then remains will sellers, landlords and property managers actually benefit from this pre-exposure or will it somehow hurt their potential sales when it finally does hit the market? Another concern floating around is the fear that this practice will attract deal-hunting professional investors and open up the floodgates for early low-ball offers.
Most believe Zillow will be offering this service to owners, landlords and property managers for their rentals as well, after an initial period when it is only available to Zillow Premier Agents. Tell us what you think about the practice; will it help or harm your listings to have them publicized up to 30 days before they’re actually available?