New pre-marketing platforms face trust issues, adoption hurdles: Intel

Many real estate agents don’t see newly announced portal partnerships as a compelling reason to employ a “coming soon” listing period more often, a new Intel survey suggests.

And most agents Intel surveyed in March said they still harbored concerns about whether the shift toward pre-market listings would be good for consumers or the industry.

This installment of the Intel Index survey was conducted in the days after major brokerage companies rolled out new pre-marketing partnerships with Zillow, Realtor.com and Homes.com in response to Compass’ previously announced deal with Rocket’s Redfin platform.

And it shows that while some agents think the additional portal exposure sweetens the deal, many assert that it won’t move the needle in their recommendations to clients.

For this analysis, Intel analyzed responses from two main groups: agents at Compass-owned brokerages or with Compass-acquired brands; and agents who were part of the initial Zillow Preview partner group. (The list of Zillow Preview partner agents has since expanded, but not in time for the survey to capture their involvement.)

See Intel’s full list of findings in this week’s report.

An uphill climb

The rise of pre-market listing partnerships presents additional exposure opportunities to test pricing and gauge interest for a listing before a broader release on the MLS.

But few agents told Intel that their recommendations to clients will change as a result. 

And Compass agents and Zillow Preview agents hold very different points of view on the new platforms. 

• Compass agents were nearly 4 times as likely as agents with Zillow Preview access to say their new partnership would lead them to recommend a coming-soon strategy “much more often” to their clients. 
• Still, this group represented only one-fifth of Compass respondents.

Meanwhile, a small but significant minority of agents with Zillow Preview access — 17 percent of those surveyed by Intel — said that the increased exposure makes coming-soons a more viable option than they were before.

So clearly these new platforms will attract some early usage.

But the vast majority of all agent respondent groups said they did not expect they would change their recommendations to clients based on the availability of these new partnerships. These split into two main camps.

• 41 percent of Compass agent respondents said they already used pre-marketing when appropriate, and that they weren’t planning to change how often they recommended the strategy. An almost identical share of agents at Zillow Preview brokerages said the same.
• Only 22 percent of Compass respondents said they rarely or never use pre-marketing due to a belief that an immediate, active MLS listing is best for the consumer. Nearly twice that share of Zillow Preview partner agents — 38 percent — said the same.

Part of the resistance to widespread adoption of pre-marketing stems from long-running agent ambivalence about whether the listing tactic actually gets results.

Question: In your professional experience, how much more or less money does a home sell for when employing a “coming soon,” pre-market phased strategy?

• 17 percent — My listings fetch a higher sale price with “coming soon” marketing.
• 51 percent — My listings sell for about the same price either way.
• 6 percent — My listings sell for less with “coming soon” marketing.
• 26 percent — I don’t have enough experience with this strategy to say.

Perhaps surprisingly, even agents at Compass largely resembled those at other brokerages on this point. 

Most said the phased, pre-marketing strategy didn’t produce a noticeable increase in sale price compared to a traditional public campaign. But at the same time, more said that it helped than hurt.

And for most agents who had pursued this strategy, there was no clear downside in terms of time-to-sale either.

Question: When factoring in both the pre-marketing phase and the active listing phase, how does a “coming soon” strategy impact the total time it takes to sell a home?

• 28 percent — It speeds up the overall process — Generating early interest often leads to immediate offers once the home officially goes active.
• 37 percent — It takes about the same amount of time — The total days from listing agreement to an accepted offer remain relatively constant.
• 15 percent — It prolongs the overall process — The “coming soon” period adds days to the front end without consistently accelerating the time-to-offer once active.
• 20 percent — I don’t have enough experience with this strategy to say.

It’s worth noting that agents did split in one area on this question: Agents with a known affiliation with Zillow Preview were twice as likely as Compass agents to say that a pre-market phase prolonged the time it takes to sell a home. Compass agents, on the other hand, were a bit more likely to either say this strategy speeds up the overall homeselling process.

The trend: Good or bad?

Agents from the Compass-Rocket camp and Zillow Preview group were deeply divided, however, on whether these new pre-marketing partnerships were good for the industry and consumers.

Question: Several of the new portal pre-marketing tools may allow listings to accrue zero “days on market” and mask price changes during the preview phase. Which of the following statements best describes your thoughts on this?

• 43 percent — It will significantly undermine data integrity — Obscuring “days on market” and price history makes these metrics less trustworthy, harming buyers and the industry.
• 20 percent — It will slightly undermine data integrity — These metrics may become slightly less accurate, but the overall harm to the market will be minimal.
• 20 percent — It will have little to no impact — The industry and consumers will seamlessly adapt to how pre-market time is tracked.
• 17 percent — It will improve market fairness — The “days on market” clock and premature price reductions can unfairly stigmatize a listing. Allowing sellers to test the market privately is a net positive.

While agents were broadly likely to say that they saw this as an unwelcome effect on the trust they could place on days on market, Compass agent respondents weren’t as sure.

• 30 percent of Compass respondents said they thought that stats like “days on market” and price reduction history unfairly stigmatized listings, and that the new approach was fairer. That share was 3 times as big as the one among agents with Zillow Preview partner brokerages.
• On the other side of the coin, agents with Zillow Preview-affiliated brokerages were twice as likely as Compass agents to say they thought that widespread pre-marketing risked significantly undermining data integrity — 51 percent vs. 25 percent.

And while no industry-wide consensus has developed around whether this shift helps or harms consumers on balance, agents outside the Compass ecosystem still lean strongly against the wisdom of widespread pre-marketing, even after they learned their own brokerage brand had struck a deal with one of the portals.

• 61 percent of agent respondents with Zillow Preview-aligned brokerages said that they saw this move as a setback for clients. 
• The vast bulk of this group, amounting to 49 percent of the Zillow Preview response pool, went so far as to describe the shift as “a major threat to consumers.”

Compass agents, on the other hand, were more likely to see the move as a win for consumers — but less likely to use confident language to describe the impact.

• 46 percent of Compass agent respondents said they saw the shift toward pre-marketing as a net positive for consumers.
• But less than half of that group — 22 percent of Compass agent respondents — went so far as to describe it as a “major victory” for clients.

Intel surveys will continue to track these trends in the months ahead.

Methodology notes: This month’s Inman Intel Index survey ran from March 24 through April 2, and received 474 responses. The entire Inman reader community was invited to participate, and a rotating, randomized selection of community members was prompted to participate by email. Users responded to a series of questions related to their self-identified corner of the real estate industry — including real estate agents, brokerage leaders, lenders and proptech entrepreneurs. Results reflect the opinions of the engaged Inman community, which may not always match those of the broader real estate industry. This survey is conducted monthly.

Email Daniel Houston