As the inventory of homes for sale in the Triangle has hovered at historic lows for the past 18 months, it has helped spawn a marketing phenomenon among sellers here.
Instead of simply planting a “for sale” sign in their yard when their home is entered into Triangle Multiple Listing Services, a growing number of sellers have chosen to put up “coming soon” signs in an effort to create buzz around their property.
The practice is controversial among real estate agents, with some viewing it as a useful marketing practice while others see it as a way of limiting access to much-needed inventory.
“We’re just like cats fighting over a ball of string … all the infighting that goes on about it,” said Jason Graves, an agent with Triangle Real Estate Group. “Absolutely it’s controversial. There are defined camps out there that have opinions they follow.”
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There are no hard numbers on how widespread the practice has become here, but anyone who’s driven around the Triangle lately can attest to its growing popularity.
“It seems to have come about with the lack of inventory,” said Tom Gongaware, a general manager with Allen Tate Real Estate and a Triangle MLS board member. He said the phenomenon has been popular for years in other markets, particularly places such as California that experienced rapid price increases during the housing bubble.
Agents who use the “coming soon” approach with their clients must adhere to both the Realtor code of ethics and Triangle MLS rules.
Rules to follow
The Realtor code of ethics requires that agents cooperate with competitors. That means providing access to a listed property based on whatever marketing terms the seller authorizes. Such terms, and the period over which they will be in place, are spelled out in the listing agreement between a brokerage firm and the seller.
An agreement is required before any sign is placed in a yard, whether it be a “for sale” sign or a “coming soon” sign.
Graves said one argument against the “coming soon” approach is that it is used by agents to crowd out competition in an attempt to secure a dual-agent role that would earn them double the commission on a transaction.
“That’s a valid argument; there’s an ethic there that we have to follow,” he said.
Most sellers who authorize the use of a “coming soon” sign eventually list their homes in MLS. Graves recently used a “coming soon” sign for a listing in Raleigh’s Wakefield neighborhood. He got one inquiry during the period the sign was up, but ultimately the house ended up being entered into MLS and sold to another buyer.
“I use it to help build momentum. Neighbors can help promote it. It can help build excitement,” Graves said. “… Not every seller wants us to employ every strategy. We discuss these strategies with them upfront.”
Marti Hampton, owner of Re/Max One Realty in Raleigh, has used “coming soon” signs for seven years and recommends them for all of her listings. At the beginning of the year, her office launched www.comingverysoon.com to feature such houses.
“The reason I do it in real estate is because it gives you a moment in time where you’ve focused all of the buyers that have an intention on that price range and that area, you’ve focused them on that house as it comes on the market,” said Hampton, who personally exclusively represents sellers. “You also focus all the agents that have buyers, so you get all the current buyers in the market together in a room at the same time.”
Hampton said sellers need an agent who understands the real estate cycle, which will dictate how long the “coming soon” marketing period should last. At the moment, she recommends a short promotional period.
“But even in a short cycle you still need two weeks,” she said.
If sellers choose not to have their house entered into Triangle MLS, they must sign a form authorizing their agent to withhold the listing. The form outlines what the seller may be giving up by not placing their property in MLS.
‘Shrouded in mystery’
“The seller should always be driving the bus on these. … It should not be a marketing ploy by a real estate agent or firm,” Gongaware said. “It can certainly be a very viable and useful business practice … but only with the full blessing and understanding of the seller.”
Critics of “coming soon” signs say that the practice can prevent buyers’ agents from being made aware of a property.
Their frustration with the practice has only escalated as the Triangle’s lack of inventory has become more acute, particularly in extremely sought-after neighborhoods.
Gongaware said it can be difficult to figure out how sellers intend to market their property based simply on a “coming soon” sign. “It’s shrouded in mystery sometimes what the ‘coming soon’ sign really means,” he said.
Graves said that, depending on the sellers’ situation, they may not be interested in having a drawn-out sales process or in dealing with the stress and inconvenience of having a crush of showings.
“I do this with a lot of my listings because a lot of people seem very comfortable with how I do stuff,” he said. “But I think that if you, as an agent, don’t employ a strategy that’s very well planned out, you can get yourself into a gray area.”
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