This past week has been very active in the world of real estate. Zilllow which is an online real estate advertising vehicle introduced a new feature called “Coming Soon” where agents are supposed to upload listings pre an official entry into the local multiple listing service. This whole concept is very controversial with agents/brokers having very strong opposing opinions on this.
So how does this work? Well let’s say I list your house for sale but you are still preparing the landscaping and you want to wait a week or two before you officially put the property onto the market meaning the multiple listing service. Your agent says great but we have an opportunity to generate excitement and perhaps get offers if I put the listing onto Zillow as “Coming Soon”.
This issue a lightening rod within the industry. There have always been “pre marketing” of listings which used to be called “pocket listings” and are now called “Coming Soon” listings. The controversy centers around dual agency and listing agents “double dipping” and having both sides of the commission.
When a listing agent puts a property into “Coming Soon” on Zillow it is not on the multiple listing service and there is no agreement between Brokerages to cooperate and share commission. That listing agent will receive all of the calls on that listing and because that caller may have their own buyer’s agent the “Coming Soon” listing means that the listing agent does not have to allow any other agents to view/show the property to their buyers, they are not obligated to pay the commission to the other agent and if that buyer wants to see that property they may be forced to buy it through the sellers agent.
None of which is in the best interests of either a buyer or a seller. A buyer has a right to representation from an agent they choose and should not lose out on a property because of a real estate practice. A seller will receive limited exposure and their property will not be presented to all of the buyers in the marketplace – they may be leaving money on the table because the one buyer who would pay them a higher price for their property is not aware that their house is on the market. Seller’s would not be letting the market dictate the price.
Zillow is a for profit company that has stockholders and accountability to increase profits. They make their money by selling advertising to real estate brokerages and agents and are not governed by our licensing laws or the Realtor Code of Ethics…all they are interested in driving traffic to their site and increasing the number of agents that pay them each month.
One of the other comments on social media are:
If you put a property on the internet and call it “Coming Soon” and it sells before “Coming Soon” on the multiple listing service that is false advertising and is not legal in many states;
The Real Estate Commission in the State of Colorado is the first to address this subject vis a vis licensing and what is in the best interests of the buying and selling public and won’t be the last.