To PreMarket or not to PreMarket

When House Buyers had a commanding grip on the market and seemed to hold most all of the cards, house sellers and their agents would try most anything to get their attention.

Conventional wisdom shifted towards the notion of the power of “PreMarketing” . . . to “leak” information about the house before actually listing it on the market. “Coming Soon” sign-riders would appear on for sale signs days (sometimes weeks) before listing it for sale and permitting Buyer previewings.

These “Teaser Campaigns” were intended to build excitement . . . intrigue prospective buyers . . . and create a momentum that would UNLEASH as soon as the first viewings were allowed (or so the story goes).

Some lucky REALTORS would hear about “coming soon” listings even EARLIER and might even be able to show them before anyone else even knew it was coming on the market . . . and they would treat their Buyers to a “First Buyer to See” performance.

If it worked, it would possibly stir up a small tribe of Buyers who might begin competing to “WIN” . . . and occasionally result a higher than market value sale without the pesky need for staging and showing and conventional marketing.

Things have changed.

PreMarketing can now backfire in a serious way.

Many areas have now swung wildly to the “Sellers’ Market” side in which values are actually increasing with virtually every new sale.

These days, the inventory of available houses is LOW . . . so any new listing gets LOTS of attention by hungry buyers.

Any level of premarketing may result in what I call a “Too Fast” sale . . .

Sellers and Listing agents who allow showings before exposing the house to the WHOLE market are narrowing their pool of prospective buyers to an elite few who may JUMP immediately and snatch it up.

“What’s wrong with THAT?” say you

What’s wrong with it is that (IMHO) unless a property is exposed to the WHOLE market, the Seller will never know true market value which could be significantly higher than the scientific “Comparable Analysis Value.”

Who’s to say that multiple Buyers might show up upon initial listing and bring multiple offers (some might even have escalation clauses) thereby “bidding the price over the listing price?”

Case study:

Seller A lives in a “Tract Neighborhood” in which the comparable sales justify a price of $200,000 for floor plan “2450.” Agent A advises Seller A to price their house at $200,000 and recommends that they premarket the “Coming Soon” listing to her network of preferred REALTORS.

Seller A agrees, and the plan swings into action . . . The property SELLS to the first Buyers who looks at it (premarket) . . . $200,000 – CLEAN offer.

Everyone is ecstatic until . . .

Seller B . . . 3 doors down . . . Floor plan “2450” in comparable condition and identical lot size . . . LISTS his house at $225,000 . . . and is IMMEDIATELY covered with prospective Buyer viewings resulting in 3 offers and ultimately selling “Over Asking price” within 3 days of coming on the market.

Seller A is NOT happy anymore . . . 25,000 could have been $  . . . MISSED!

all due to an “antiquated marketing strategy”

How long does it take for a marketing strategy to become “antiquated?”

We don’t know . . . When the market shifts, it does so QUICKLY!

The REALTORS who are able to stay ahead (or with) this “game” are the ones who consistently study housing SUPPLY inventory as it relates to Buyer DEMAND.

In a shifting market (which is ALWAYS), these statisticians’ clients WIN!

My lesson:

ALWAYS QUESTION!

 

Published by Barry Owen

Strategist-CEO of Pareto Realty Real estate sales Professional Inviter-Facilitator-Practicer of Open Space Technology Opening safe space for people & organizations to self-organize around issues & opportunities BarryOwen.US Invite-Listen-Love

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