A Popular Marketing Tactic Crosses the Fair Housing Line.
You’ve seen the Facebook posts heralding “Coming Soon! Call ME for your first look”. This type of marketing has become all to commonplace in real estate sales. The hook teases an upcoming property avaialble to buyers before it goes on the “market”. It promotes an exclusivity that is meant to get the potential buyer to call the listing broker directly to see/purchase the property. The property is generally not listed in the MLS system or on key housing portals such as Zillow or Realtor.com where buyers traditionally look for homes. In a busy real estate market many new listings are sold in this manner.
Why is Coming Soon marketing popular among real estate agents? As the old adage says, “follow the money”. If an agent is able to sell one of their listings to a buyer themselves, they essentially make twice as much commission then they would if they were to work with a buyer who had their own agent. This is a powerful motivator to use tactics that encourage buyers to work with a listing agent directly versus buyers who already have an agent.
How is Coming Soon discriminatory?
The key issue with Coming Soon advertising is its exclusivity and lack of traditional scale. A listing that is placed on the open market via the Multiple Listing Service (MLS) goes out to all buyers through a variety of different channels (broker websites, Realtor.com, Zillow, etc). It is the traditional and accepted way of finding homes that are avaialble for sale. Buyers depend on these channels to find new listings and agents depend on them for listing details.
Coming Soon listings, on the contrary, have a limited distribution usually via social media or word of mouth. A buyer must know to look in a non-traditional place for a listing or contact an agent that has the listing. The real estate community at large is not exposed to the listing and can not inform their clients of a property that may meet their needs.
The issue of limited distribution causes additional issues. Consider these statistics from the Pew Research Center:
- Use of social media is 4% less by Black Americans than White Americans
- The gap is a little less for Hispanic Americans (3%)
- There is a 13% gap in access to internet in the home between Black and White Americans and a 18% gap between White Americans and Hispanic Americans
- There is a gap of 50% in the usage of social media by seniors (65+) versus Millennials
The research is clear. The use of social media and internet access by several protected classes is less that that of the majority. Coming soon listings focus on limited distribution in order to redirect inquiries and potential buyers for a listing. Combine this limited distribution with the fact that usage of social media and broadband internet is lower by some protected classes and you have a situation where some minorities and protected classes are potentially being excluded from an entire subset of real estate listings. Since social media adoption is considerably lower by older Americans as well, the coming soon tactic can result in age discrimination.
How do we prevent housing discrimination in new listings?
The solution to preventing housing discrimination in new listings is to remove the exclusivity that the Coming Soon tactic creates. To accomplish Fair Housing goals, all qualified buyers should have access to all listings. To address these issues some real estate associations, including the Midland Board of REALTORS®, have implemented a Coming Soon status in the MLS. Coming Soon listings in the MLS have full distribution to portals such as Zillow and visibility to all buyers and agents. Use of this method removes the exclusivity. This methodology is the appropriate manner to market a property as Coming Soon. This method however isn’t being used by listing agents and the housing discrimination continues.
What to do if you feel you have been discriminated against with Coming Soon.
If you feel you have been discriminated against in any type of housing, there are protections set up for you. The starting step is to file a Fair Housing Complaint. You can do this on the State or Federal level, or both. Here are links to the resources avaialble to you.
About Tom Webb
Tom Webb is a Midland-based real estate broker who is committed to Fair Housing in both letter and intent. Tom holds the At Home with Diversity (AHWD) certification from the National Association of REALTORS®. Tom also serves on the Fair Housing Committee of Michigan REALTORS® and is a member of the Council for Inclusion in Financial Services (CIFS).