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Are Coming Soon Listings A Good Idea For Sellers
Recently there have been some agencies promoting "coming soon" or "pre-market" listings as a new marketing strategy for their sellers.
What are these types of listing?
"Coming Soon Listings" or "Pocket Listings" have been around as long as there have been agents. These types of listings allow the listing agent to promote the listing without allowing other agents the opportunity to show the listing themselves. In essence, if someone wants to see that house, they can feel "forced" into using the listing agent. In most states they are illegal... including Indiana. However, there is a little known exception form that is being used to legally circumvent these protections for sellers. By signing this form, a seller forfeits listing their house on the MLS, but instead allows the agent to list the home and market it via other channels such as social media.
What are the advantages of doing this?
The agent will justify this approach by stating it generates interest before the home goes live on the MLS. They will also state that it allows them to market the home prior to staging, pictures, or updates the seller might be waiting for. There are many other "reasons" given, but there are NO statistical facts to support their position. Many times they will point to the fact that they sold House A in less than 24 hours at full asking price. That sounds really impressive until you find out there was someone else willing to pay $10k more and was a cash buyer.
Any good agent can tell you plenty of stories of homes being sold in a day, but even that is not always in the seller's best interest.
Why would an agent propose such a plan?
The simple answer is money. By solely promoting the listing themselves, they increase their odds significantly of representing both sides of the transaction. The legal term for this is Limited Agency. Amongst agents, we refer to these situations as me/mes because we get both the seller and buyer commissions.
So what are the disadvantages? (there are many, these are just a few)
The home will only be marketed to a very small subset of the buyer pool and therefore reduce competition for the home.
In a limited agency situation, neither the buyer or seller has representation since the agent has to becomes a neutral third party.
Most clients don't know what questions to ask. It is our job as professional agents to protect our clients even when they don't ask.
Sellers will almost always be leaving "money on the table" by using this strategy. It's is simple logic... more buyers, more competition, more offers, the higher the sale price.
So what should I do?
Interview at least 3 agents. There is a difference. Ask them what their marketing plan is and statistics supporting their approach. Even without statistics, does the plan make logical sense? Ask how you will know if their plan is working... what if your house hasn't sold in a day, week or month? A good agent will know statistics and be able to provide a plan for today, next week and next month.
In November 2014, I made the decision to get my real estate license and join Keller Williams. Shortly thereafter I was blessed with the opportunity to join the Dietel Realty Group with a goal to build....
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