With an inventory pool that’s becoming increasingly limited, sellers are now able to test their listing on the market for up to 21 days before the listing goes live, giving brokers and buyers a heads up as to what’s coming.
“It’s beneficial for a seller that’s not quite ready to put their house on the market, and it can help buyers better navigate the extremely competitive market we are witnessing,” said Steve High of Villa Real Estate.
“In getting word out about a property to the entire brokerage community ahead of time, more momentum can be built.”
About a year ago, the NAR placed a ban—formally a “Clear Cooperation Policy”—on pocket listings, or for-sale properties not listed with the MLS.
Pocket listings were a popular selling strategy among luxury brokers across the nation and by high-net-worth sellers seeking a low profile when listing homes.
The new policy required agents to list properties on a multiple listing service, or MLS, within one business day of being marketed to the public, in an attempt to restore transparency to homebuying, and preventing agents from acting in their own interest as opposed to the interest of their clients.
“Many realtors were starting to get greedy with their listings, and properties were coming online and selling without being exposed to (the) entire marketplace,” High said.
Though some local brokers, including High, believed the ban to be a positive industry change, some shared concerns.
Compass, a brokerage with a fast-growing presence in the local luxury market, noted at the time that a one-size-fits-all marketing approach can have negative repercussions on the market, and homeowners should have the final say.
The new “coming soon” addition is in part a response to this pushback, with High viewing it as a compromise of sorts.
“This way, if a broker has a client that wants to sell their property but isn’t quite ready to put it on the market, they can list it as ‘coming soon,’ which gets the word out to the larger marketplace and gives buyers a larger idea of what is coming online in the marketplace,” High said.
If an agent chooses the coming soon option, they’re unable to advertise or do showings until that property comes online, which can widen a buyer pool for a specific property.
“It can also lead to shorter days on market and higher sale prices, because often when an interested buyer sees other interested buyers, it forces them to react quicker,” High said.
High utilized the new MLS option for a Newport Heights listing he shares with business partner Evan Corkett, in which the seller wanted to complete some light remodeling before showing the property.
“The outcome was we had seven showings on the first day (and) we were ready to put the house on the market, which materialized into several offers,” High said.
Hot Market, Low Inventory
In a hot market like the one OC is currently experiencing, the new option could generate even more momentum for local luxe listings.
Stay-at-home orders prompted by the coronavirus helped to bolster one of the strongest luxury real estate markets ever seen last year in Orange County.
“People realized how important the home was, and many upgraded to newer or larger spaces,” High said.
Those orders are coming to an end as vaccines continue to roll out and the state gets closer to its goal of reopening by June 15, but buyer demand has not let up.
That’s largely due to the county’s lack of luxury homes for sale.
“The market is as crazy as I’ve ever seen it in my 35 years of business,” High said. “It’s a runaway train.”
High adds that the county is “dangerously close to having the lowest inventory levels in the last 40 years.”