Why a ‘Coming Soon’ or ‘Compass Exclusive’ can Cost a Seller a LOT of Money
Yes, you’ve probably heard how 'Coming Soon' or ‘Compass Exclusives’ real estate marketing is the way to go and is often idealized as the best thing since sliced bread! They have connotations of nice, shiny, neon signs flashing and getting the attention of buyers out there. I can hear you say, right now, 'but advertising a home prior to it coming on the market or as a ‘Private Exclusive’ is a really good thing, so how can it cost a seller a LOT of money?'
Let’s look at both of these options separately and then you can see why both options will cost the seller lots of money.
Coming Soon
You're right. Advertising a home prior to it coming on the market can build up the anticipation of the home coming on the market IF, and that is a big IF, it’s done the right way.
So, let's explore what I mean by 'IF it’s done the right way' and to do this we need to consider some important characteristics of the real estate market, not only in the strong real estate market we are in with continual price appreciation, but this applies in any market whether it’s a buyers market, a sellers market, or a balanced market.
In today's market, we are seeing low inventory and strong buyer demand resulting in some towns having more than 50% of the homes selling for over the asking price, and often well over. It's all about smart decisions being made, preparation, staging, marketing and working in partnership with your agent where we see results that far exceed sellers expectations.
So, why can Coming Soon cost the seller a LOT of money? To be honest, and this is why we do what we do (educate consumers), it depends on the ethics and motivations of the agent you hire to sell your home.
Let’s talk a little about what happens when a Coming Soon sign is up out front of a home, or the agent markets the home as a 'Coming Soon' within their brokerage. For a buyer in this market where competition causes some buyers to pay over market value for a home, having the opportunity to buy a home with no competition is very compelling. So, the buyer contacts the listing agent (the person with the sign out front of the home or who is advertising it as a Coming Soon) and asks to see the home before it comes on the market. If the agent is thinking of the sellers best interests they will thank the buyer for their interest and let them know when the home is coming on the market, optimally within a few days or a couple of weeks at the very most, and then contacts the buyer when the home comes on the market and is available for ALL to see. If the agent is thinking of what will put the most money in the agents own pocket, then they will arrange to show the buyer the home while it is still a Coming Soon and then present the resultant offer from the buyers to the seller. More often than not when that is done, the seller will accept the offer before the larger buyer pool even knows that the home was available to buy.
Why is this a bad thing?
The seller already has contracted with the listing agent to pay a Professional Fee (the commission payable) for the sale of the home. This fee generally encompasses what the seller will pay the listing agent and an amount the seller would like to pay the buyers agent. When the home is a Coming Soon and nobody knows it is on the market, then the WHOLE previously contracted fee is paid to the Listing Agent. A 'double-deal' means more money in the listing agents pocket ! This is called a 'pocket listing'. This is such an unethical thing to do that the NAR (National Association of Realtors) has banned it from being used by Realtors. But, enforcement or penalties on agents that do this are almost non-existent.
Compass Exclusives
In a slight variation on this theme, the listing agent lets agents in their office know about the home being available and one of the agents in their office has the buyer. The large proportion of these sales are touted by Compass as being the right thing to do. They may convince sellers to ‘try this for a couple of weeks and if we don’t sell then we’ll bring it on MLS for everyone to see’. But what happens then is if one of the agents in the brokerage have a buyer then the brokerage gets paid the WHOLE fee. Again, more money in the agents and brokerage pocket!
More often than not, these home end up selling for far less than they could have because, again, the home is only being exposed to a limited number of agents in that brokerage.
How is a home considered exposed (marketed) to all of the buyers who want a home when its only shown to one buyer, or a few buyers within a brokerage? Anyone who understands marketing will tell you that the mantra of "exposure, exposure, exposure" is not happening when the home doesn't come on MLS (and subsequently hundreds real estate portals e.g. Zillow, Redfin, Realtor.com etc) and is exposed to all the agents, and all of the buyers who are out there looking for EXACTLY this home.
A recent study conducted over 2 years of a large MLS based in 6 mid-Atlantic states found that a home which was NOT exposed in MLS ('Coming Soon', 'Exclusively Marketed', 'Whisper Listing', or 'Office Exclusive') will sell for 16.98% LESS. Details of this study can be found at:
On/Off MLS Study: Homes marketed through the MLS sell for 16.98% more
Let's look at the impact of losing 16.98% of the sale price as it relates to the distribution of sale price to list price ratio in Lexington in 2025. The red line of 16.98% below the asking price show's the impact compared to the statistical data for this town. What keeps us up at night is how do we prevent sellers from thinking that this scheme (aka scam) is a good thing, and the only way we can think of doing it is by putting out blog posts providing information to people of how much they could lose when selling their home this way...
It comes down to basic ratios. These ratios give the same result whether you're talking about 'Coming Soon' sales, ‘Office Exclusives’ or off market sales, or 'whisper sales'. Let's say that 10% of the people who see the home fall in love with the home, and want to buy it. Lets say that 5 people see the home as a Coming Soon or off-market sale, or ‘Office Exclusive’ or whisper sale, then that is, at most, 1 buyer who will fall in love with the home. But, using the same ratios, if 100 people see the home because it’s on MLS and the whole market knows about the home, then you have using the same ratios, 10 people who want to buy the home because they fell in love with it - we now get competition on the home and the price goes up.
So why are some agents able to convince sellers that selling their home off-market ( effectively what a Coming Soon or ‘Office Exclusive’ is) is a good thing. I believe it comes down to the seller trusting the agent they are talking to, and not understanding that selling it this way benefits the agent/brokerage wholly and solely, rather than maximizing the sale price the seller could get. Unfortunately, this technique is gaining traction in the industry as agents and brokerages are focused on the money in their own pockets, rather than getting the highest price for their clients, which is sad reflection on the industry in which we belong.
In some rare instances, selling a Coming Soon, is acceptable. BUT, this is ONLY when the seller is a builder who sells homes day in, and day out, and who understands that they could get more if they waited until the home was completed. They are making a business decision based on their carrying & holding costs for, say, the remaining 6 months before the home is finished versus selling the home to a buyer 6 months prior to completion for a price the seller determines.
The shameful technique of the 'Coming Soon' or ‘Office Exclusive’ in this industry where an unsuspecting consumer who may not have sold a home in the last 5 years or the last 50 years or anywhere in between, is unwittingly convinced to sell their home using this method. If you know of a colleague, or friend, or family member who is considering this approach, then please, please, please warn them.
We need to get the message out, far and wide. For most sellers their home is the most expensive asset that they own, so to sell it for less than is a tragedy. DON'T let sellers lose a lot of money when they sell their home by being convinced to use this technique.
If you would like an estimate of what your home would sell for in today's market I would be more than happy to come by, have a look at your home, and then provide a CMA (comparative market analysis) which will provide you with an estimate of what your home should sell for, along with a marketing plan to get maximum exposure for your home