Zillow’s Coming Soon Section … Good Idea or Bad?
I have seen several statistics that say that 9 of 10 real estate transactions involve at least one agent. I have also seen several statistics that indicate 9 of 10 real estate transactions actually involve both a buyer’s and seller’s agent.
And just so you realize, Zillow only carries about 10% of all of the real estate portal traffic (depending on which web survey you choose to believe.) Oh, and the traffic which flows through Zillow, along with legitimate home buyers, is that of researchers, ‘looky-loos’, serial shoppers and renters. The real buyer traffic Zillow drives on a daily basis is only a fraction of the real home-buying traffic Zillow would have you believe. It is unfortunate that Zillow constantly perpetrates the myth not only about how much traffic they carry, but its quality … but that is another post for another day.
Zillow’s ‘Coming Soon’
So cue the nefarious ‘Coming Soon’ section of Zillow.
It another attempt to drive traffic, Zillow created a place on their site where sellers can announce they intend to sell their home. Buyers can see these homes and attempt to buy it before it officially hits the market. The seller’s motivation is to save commissions and the buyer’s motivation is finding properties before they hit the market. In theory, it has great appeal.
But is it a good idea? Let’s ask it this way – Does any seller of any item get more or less when they only tell a handful of people? I think the answer is obvious.
Selling ‘softly’ or ‘quietly’ misses the single most important point about selling a home – competition for an asset increases its value. This holds particularly true in areas lacking quality inventory. Proper exposure maximizes the number of buyers and forces them to compete. It is, without a doubt, the best way to get your strongest offer.
(it is interesting to note that Realtors check the ‘coming soon’ pages often in an attempt to find under-priced properties, but once again, another post for another day…)
Getting Your Best Offer
I once heard an auctioneer say that any time two people are in the same room at the same time trying to buy the same thing, the seller gets market value … and when three are chasing the same thing, the seller will get more than market. Having been to numerous auctions, I wholeheartedly agree. I have never been in an auction setting where I thought a buyer made a great deal for themselves. Knowing this, why would anyone want to decrease the competition for their property?
And most people tend to think exclusively in terms of price, but offers are made up of PRICE AND TERMS. Getting a great price is partially, if not completely, negated if the seller has to move twice or is forced to purchase the improper home due to time constraints.
Simply stated – the more competition is created, the better BOTH price and terms get. The ‘Coming Soon’ section of Zillow undermines seller leverage by allowing the property to slowly enter the market to a limited number of its potential buyers. What are the chances that everyone who is interested in your property will find it if it is listed on only one message board? Very small indeed …
But What About the Commissions?
Great point … what about those dreaded commissions?
We wrote a post which breaks down the commission savings here in more detail, but suffice it to say, they are not as great as most think. People tend to view commissions as expenses … which is not necessarily the case. A good Realtor is an investment and making a good hire will far offset the expense incurred. If you feel your agent is an expense, find a new one.
- know how to create competition and competition drives prices up
- negotiate and save you money
- interpret market conditions and help your decision making
- know how navigate lending, title, appraisal, inspection and closing issues which always arise
- recommend good service providers which make the transaction smoother
Do you know where the most serious, qualified and motivated buyers are right now? Riding around in a car with their skilled buyer’s agent, that’s where. Shouldn’t you want someone to represent you when they show up?
And let’s not forget the one cost most often ignored or improperly valued – time. The time required to successfully manage a transaction is far more than any seller realizes and in many cases, the time savings alone can justify the commission expense.
Now – do not take this article as someone saying that if you do not use an agent, your home will not sell. Nor is it saying that ‘Coming Soon’ does not have its place. This article is simply stating that using an agent and correctly leveraging the most powerful network (MLS) will typically generate value in the transaction in excess of the commission rate. Using techniques like ‘Coming Soon’ may avoid commissions, but not without costing you on many other fronts. Make sure you are calculating the savings correctly.
If you are selling to a friend (or friend of a friend) or are not necessarily worried about getting every penny out of your property, then Coming Soon or other ‘word of mouth’ techniques might be the best way to sell your home. But if you are interested in selling at both maximum value and for the best terms, exposing it to the most qualified buyers in a finite time period with guidance from an experienced agent will always yield the best results.