zillo's coming soon search feature

The real estate industry is ever changing with search functions, new home search apps, various search methods, which brokerage or website has the most property information, who has the latest homes for sale, and this is all inside a highly competitive industry. That competition stems from agent personalities, abilities, and a strong desire to gain more exposure for their listed properties and when viewing the industry at a company level the competition is no-less than fierce.

National portal or syndication websites continue to roll out consumer focused products, be the source for buyers and home sellers, and be or remain an industry leader.

It should be noted that national portal and syndication websites are not in the business of selling homes, they are in the business of generating consumer traffic in order to sell consumer contact information, leads, to real estate brokers and mortgage originators. There is a old saying in real estate, "to get rich in real estate, sell stuff to real estate agents".

I am not here to bash on national portal and syndication websites and their business models; however, it is imperative to know what-is-what when using these sites and this leads me to Zillow's 'Coming Soon' search feature.

What Zillow's Coming Soon Feature

Here's a quote from Zillow's blog.

"In many markets across the country, there are many more buyers than there are for-sale homes, and buyers often experience competitive bidding wars when they do make an offer on a home. Knowledge about homes that will soon be on the market gives buyers a leg up. Now, if they find a home they like listed as Coming Soon, they are able find an agent and get their financing in order so they’ll be ready to make an offer as soon as the home hits the market. Coming Soon also gives buyers a more informed view of the available inventory in their local market. Now buyers can feel more confident when making a purchasing decision as they have a glimpse as to the types of homes that will soon be hitting the market. [SOURCE: www.zillow.com/blog/zillows-coming-soon-153687/]"

Zillow will allow real estate brokers to pre-market homes and listed for sale prior to their listing on the Northwest Multiple Listing Service (NWMLS). Seems like a pretty good deal for consumers. Finding a home prior to the thousands of people using other real estate websites - get ahead of other home buyers right? Not exactly.

Under NWMLS rules, broker members are not permitted to pre-market properties that are not listed on the NWMLS and the term used to describe this practice is 'pocket listings'.

What are Pocket Listing

Real estate brokers, who are members of the NWMLS, have certain duties and responsibilities that 'we' have too adhere to. One of these items deals with 'pocket listings'.

Pocket listings are best defined by example: John Agent knows Jane Homeowner wants to sell her house. Instead of listing her home on the NWMLS, where John Agent is a member, John Agent insists on 3rd party advertising to market and procure a buyer for the property. In essence, John Agent has the home in his 'pocket' since that home is not available to cooperating member brokers to sell.

Why are Pocket Listings Not Allowed?

One of the most fundamental NWMLS principals is cooperation. Cooperation is what makes MLS work as other members have a equal chance in selling a particular home.

REO brokers got their hands slapped a short time ago for this very practice. REO brokers typically have a running list of client properties in various stages of coming up for sale. REO agents would put 'coming soon' signs, 'call this number for information' signs, and pre-market the properties online prior to the NWMLS listing date violating NWMLS rules.

For NWMLS member brokers, Zillow's Coming Soon search feature will be an off limits tool. The tool cannot be used to pre-market / advertise homes prior to listing.

Inside the NWMLS there ways to report member brokers for violations. In a recent attended Forms and Legal NWMLS class, Justin Haag spoke to this fact that he's already receiving emails regarding Zillow's Coming Soon search feature and I'm sure there will be no shortage of members reporting violators.

I'm sure Zillow has thought this through...