Over the past few years, it has become more common for agents to market homes for days or even weeks as “Coming Soon”. Initially that was done mostly by putting a for sale sign in the yard with a rider on it stating “Coming Soon”. Recently, agent web sites have been dedicated to “Coming Soon” listings, with preferential treatment promised to buyers who register on the web site, and one prominent national search site offers brokers with paid accounts the ability to advertise coming soon listings on its site. A couple of questions immediately spring to mind – what exactly does “Coming Soon” mean and who does it benefit.
What “Coming Soon” should mean is that the agent and property seller have entered into a listing agreement, but the seller is not quite ready for buyers to begin viewing the property. This should mean all buyers are not allowed to view the property, even those who contact the listing agent directly and agree to work through the listing agent instead of having their own buyer’s agent. Unfortunately, that is not always the way “Coming Soon” works in practice. Some agents use “Coming Soon” advertising as a way to help them gain both sides of of the sales commission, giving preferential treatment to their buyers or those working with a small group of preferred agents who have agreed to share listings in a sort of private MLS. In areas featuring high demand and tight inventories, this can be an effective strategy and serves the agents involved well as it limits the competition their buyers might have from other buyers if the property is more widely advertised and is accessible to all buyers in the market, not just those working with a small subset of area agents.
But what about the property seller? A real estate agent’s job is to promote the best interest of their client. In the case of a listing, that is the property seller. Does limiting the pool of potential buyers in any way benefit the seller? Usually not. Most property sellers desire to sell for the highest price and most favorable terms they can get, and that generally happens by exposing the property to the most potential buyers possible, making it easy for those buyers to see the property and make offers on the property, and properly negotiating with one or more buyers to secure the best price and terms possible. Limiting the pool of buyers naturally limits the number of offers, and buyers without competition from other buyers are not going to put forth as strong an offer as a buyer who knows the seller may be in a position to accept a better offer from a competing buyer.
Handled correctly, a “Coming Soon” listing can work to everyone’s benefit. The agent can work to prepare marketing materials knowing that they have a signed listing agreement in place, the seller can decide on an agent and sign an agreement while taking the time necessary to get the house ready to be shown, and some excitement and anticipation can be generated among buyers anxious to see the house and make an offer. Handled incorrectly, though, a “Coming Soon “ listing can be a major advantage to the listing agent seeking to cash in on both sides of the real estate commission but at the cost of limiting the pool of potential buyers and therefore limiting the chances for the property seller – the client the listing agent has promised to look out for – getting the best possible offer for the property. If you are selling your property and your agent advises you to advertise your listing as “Coming Soon”, make sure you understand exactly how they intend that to work and what the possible benefits and disadvantages might be to such a strategy.