TRYING TO EXCITE BUYERS? “COMING SOON” CAN BACKFIRE!
As the Spring market gets started and more and more properties come on line “For Sale”, you’re bound to start seeing a growing number of “Coming Soon” signs or banners on these homes. It’s suppose to get buyers excited and move fast. It lets the buyer believe that once this property hits the market it will go fast as demand must be building!
In order to have a “For Sale” sign on a property that is on the MLS® system, there must be a listing agreement between the seller and agent. This simply means that the home is listed under contract but the seller has decided to not allow the public in for various reasons. There can be legitimate reasons for not wanting buyers through your home just yet. Maybe the home isn’t ready and needs repairs of painting. maybe new carpeting or hardwood floors have been ordered but not yet installed. OR, maybe the listing agent has his/her own motive.
A few months ago, CBC’s Market Place did a story on the real estate industry and the subject of “Coming Soon” and other tactics like this were explored. Buyers, using their own agents to represent them would try to get into a listed property only to be told that there were no showings yet or the property was “Coming Soon”. It turns out that the listing agent actually sold the property to someone he was working with and “double Ended” the sale (meaning he was able to collect both the listing and the selling side of the commission). The other buyer was shocked. Not only did the sale take place during the “Coming Soon” period but sold for less that the buyer, who really wanted that home, was willing to pay. This is not an isolated incident. Many of the agents secretly interviewed by Market Place boasted that they double end up to 80% of their listings. We’ve been in the industry for almost 30 years and we can tell you that even 50% of sales by one agent (the listing agent) is a staggering number. In the hotter markets such as Toronto, it seems to happen often but this practise is catching on in other markets including Ottawa.
Who benefits really is the key. The client, in this case the Seller, should benefit fist and foremost. We believe that the agents should not benefit at all except for the commission that the seller and agent have agreed to in a written listing contract. One primary pillar of our industry is to work in the best interest of our clients. Another is to be fair to all whether they are our client, another agent’s client or just members of the public.
The benefit of “Coming Soon” can benefit the seller by creating excitement and potentially multiple offers but does that out-way the benefit of exposing the seller’s property to hundreds of potential buyers and their agents? The evidence is no! Keeping a property on the QT offers no benefit to the seller. Why? Because without MLS® exposure, the number of prospective buyer who will see that a specific property is available will be extremely limited to the listing agent’s own contacts. The more exposure, the more viewings, the more activity the better the results. This is why the MLS® system was developed, to give access to all buyers and agents in order to create the highest demand.
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ARE ALL AGENTS ALIKE?
The simple and clear answer is no. Just because an agent uses “Coming Soon” does not mean that there intentions are questionable. They may believe that this tactic works, and in some cases it does. The seller may request that the agent use this tactic and as long as it’s done properly, legally and within our Board’s rules, we have no issue with it. But be cautious when hiring an agent that pushes this tactic on you. Make sure that the representative explains exactly how the tactic works and what he or she is and is not allowed to do. Make sure they explain the pros and cons. In other words, make a smart and informed decision.
We are always here to answer your questions on this or any other subject. Please write us at email@example.com
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