A few of my clients over the past year have asked me what is coming soon real estate marketing and how does it work. If you have paid much attention to the real estate market lately, you have probably noticed “Coming Soon” on the occasional yard sign or certain Zillow listings.
On the surface, the ‘coming soon’ can appear like any other similar message referring to products for sale or businesses about to open. But when it comes to real estate listings, the ‘coming soon’ means several things that the average buyer or seller may not be aware of.
The argument is still out on whether a ‘coming soon’ listing has a place in the market. Some argue it can be beneficial for specific clients.
Many other real estate professionals believe the negatives far outweigh the positives for the vast majority of clients.
Whatever the final word, as of now sellers need to be aware of how ‘coming soon’ may affect their sale so they can make an informed decision about how their home is marketed.
What is a “Coming Soon” Listing?
A ‘coming soon’ listing is a listing that is not added to the MLS, or Multiple Listing Service. The standard of professional Realtors is to list each home for sale on the MLS to encourage healthy competition and ensure market data is as accurate as possible.
Listing on the MLS also guarantees unparalleled exposure for each listing, because just about every buyer, seller, and Realtor are using the MLS. When you put your home on the MLS, the world now knows your property is available to purchase.
Other terms are that are used to describe a coming soon listing, include off-MLS listings, pocket listings, and office exclusives. The most common description, however, is pocket listings.
Coming Soon Marketing—Understanding the Pros and Cons
Cons of a “Coming Soon” Listing
I believe it does a disservice to many sellers who have not thought through the ramifications of doing so.
1. Limited exposure.
If you had the choice between advertising your home for sale in a neighborhood periodical or national television, both for free, which would you choose?
The national television, hands down. You know that exposure is key to drumming up interest in your home. Letting a thousand people know about your sale vs. 1,000,000 people is obviously going to produce different results.
The MLS is the place to list a home, used by the vast majority of real estate agents and their clients. Even with the rise in popularity of internet real estate sites like Zillow, the MLS is still the gold standard for marketing a home.
2. Fewer offers.
While it can be fast and convenient to sell to the first person who inquires about a listing, most sellers are hoping for the best offer more than anything else. But when a listing does not go on the MLS, the number of people seeing it is significantly reduced.
Instead of encouraging multiple offers for various parties, a ‘coming soon’ listing ensures that only a limited number of potential buyers will even be aware of the listing.
Most sellers are hoping for a bidding war because a bidding war can drive the price up higher than it would be otherwise. While bidding wars are not always possible a ‘coming soon’ listing is sure to lessen the chances of a bidding war happening with your home.
Multiple offers mean more money in your pocket – something you’ll probably give up if you choose to let your real estate agent market your home as a coming soon listing.
3. They skew real estate appraisals.
One of the most insidious aspects of ‘coming soon’ listings is the way they can skew real estate appraisals. A real estate appraisal is based on the sales of similar properties in your area. It is a vital part of the whole real estate process, allowing everyone to be on the same page about the actual value of each home that goes up for sale.
But ‘coming soon’ listings are often not included in appraisals. Some banks won’t accept ‘coming soon’ listings as comparable. The banks will not accept them because they did not receive the same exposure as other homes.
As the name “comparable” suggests, ‘coming soon’ listings are not comparable to other listings because of their minimal marketing. It is possible they might not be considered an “arm’s length” sale if they were not available to the entire market.
Pros of a “Coming Soon” Listing
1. Increased privacy for the seller.
Not listing on the MLS does offer the advantage of increased privacy. The seller can have more control over who sees the listing because it is not going on the universally-accessed listing service.
The listing can only be shown to private groups that have been screened by the listing agent or Zillow users.
Sometimes a home may not be in excellent showing condition, and they only want a select few looking at it.
2. Limited foot traffic through the house.
Some clients prefer to have as little foot traffic going through their home as possible. By limiting the number of potential buyers who can see the property, you are pretty much guaranteeing that fewer buyers will walk through the door.
4. There might be a buyer who always wanted your house.
Some homes in a city or town just resonate with people. They will say to themselves “if that home ever comes on the market I want it!” It’s possible that there could be a buyer searching for a home to purchase and you’re coming soon sign stops them dead in their tracks.
Seeing the “coming soon sign” may stop them from buying another home and missing out on yours.
5. The listing agent is likely to be the one to sell the property (Pro for the REALTOR, not necessarily the SELLER)
The main benefit of a ‘coming soon’ listing is for the listing agent. By limiting the exposure of the listing, the agent almost guarantees he or she will be the one to sell the property. Few other agents will learn about the property, so it dramatically decreases the competition faced by the listing agent.
The potential for “dual agency” increases significantly, where the agent represents both the seller and the buyer of the property (if you allow it). A dual agent cannot serve the best interests of both buyer and seller—the seller wants the highest sales price, the buyer wants the lowest sales price—but is able to collect a double commission. The benefits in dual agency are all for the agent.
A Better Marketing Strategy
Most homeowners who put their home on the market are looking to maximize what they net from the sale. One of the best ways of doing so in a seller’s market is to defer the showings. By delaying the showings, you list your home for sale in the MLS but don’t let buyers in the door for a certain amount of time, typically 4-7 days.
By doing so, you are getting the word out to all the buyers. What you avoid is the buyer who looks at the home immediately and makes an offer that first day. While the offer may be solid, the seller misses out on other buyers who may also have been interested.
By deferring showings, you dramatically increase the odds of having multiple offers and a bidding war on the property. You are giving all the buyers in the marketplace an opportunity to see the house.
By following the deferred showing strategy, you can also at the same time put your coming soon for sale sign up the day the home enters the MLS. You are getting the best of both worlds by doing so.
So to be clear – coming soon properties are NOT the same as deferred showings.