In case you’re wondering why you aren’t seeing any of Zillow’s “Coming Soon” listings in the Seattle area (or pretty much anywhere in Western Washington, for that matter), GeekWire had a great post today on that topic: Why you won’t find Zillow’s new ‘Coming Soon’ feature in its hometown of Seattle
None of these listings have been posted on Zillow in Seattle since the launch of the service on June 12.
The Northwest Multiple Listing Service — an association of more than 21,000 real estate agents in Western Washington — actually forbids agents from engaging in the pre-marketing of properties. In other words, agents can’t drum up interest in a property before it hits the NWMLS database.
Here’s the relevant part of the rule from the NWMLS:
Members shall not promote or advertise any property in any manner whatsoever, including, but not limited to yard or other signs, flyers, websites, e-mails, texts, mailers, magazines, newspapers, open houses, previews, showings, and tours, unless a listing for that property has been delivered to NWMLS, or input by the member.
Katie Curnutte, a Zillow spokeswoman, said that they were aware of the NWMLS rules when they launched the service. She said they respect those rules, and are not actively encouraging agents to break them.
“It is a marketing tool for agents, so they need to follow the marketing rules of their own MLS and brokerage,” she said. If agents are not acting within the rules of the local MLS, Curnutte said they will remove the “coming soon” listing. She also noted that agents must check a box that they are complying with local MLS rules before posting.
The really amusing bit about all this is how Zillow has stated in the past that they are not trying to compete with MLSs or become their own MLS, but if this feature were widely adopted, Zillow would effectively become an MLS (which is itself nothing more than a marketing platform for advertising listings). Since Zillow is not a brokerage, and therefore not a member of the MLS, they can release features like this that fly in the face of MLS rules, but any agent who attempts to market a listing as “Coming Soon” will no doubt swiftly incur a hefty NWMLS fine.
The box-checking bit is also especially hilarious. Oooh, agents have to check a box! Surely they won’t use the feature in violation of MLS rules now!
I’m certainly no big fan of some of the rules and data practices of the NWMLS, but in this case they’ve got it right. The only one who would benefit from “pre-marketing” a listing is the listing agent. It’s in the best interest of the seller and potential buyers to list the home on the MLS for maximum market exposure.
I could go on, but this Inman News guest post by Doug Miller, executive director of Consumer Advocates in American Real Estate, pretty much sums it up.
In a hot market, pocket listings will almost always generate offers. That is not “test marketing” to gauge demand or pricing. Worse, when that offer comes in, the seller is placed in the undesirable situation of either accepting an offer generated by a semiclosed marketplace or rejecting that offer and putting the house on the MLS. The result is to place the seller in a decision clouded by duress. No fiduciary should ever put their clients in such a situation. And no fiduciary (broker or agent) who is financially biased with a double fee should ever “advise” their clients in this situation, as such advice would certainly be construed to be self‐serving.
Pocket listings exist to generate a double fee. That’s it. Every argument in favor of pocket listings is little more than self‐serving rationalizations that do not survive logical analysis.
If this is a subject that interests you, it’s worth reading the whole thing.