SUMMARY: MLS reports these types of sales, for all real estate firms, as “zero days on market”, see below for explanation.
Hunter Rowe advises sellers about improvements they can make to their homes that would yield a good return on investment, and also cause the home to sell faster. In these cases, and ONLY these cases, we market the home as “Coming Soon” with a yard sign, to our buyers, and other real estate agents in our “Home Selling Partners” program.
We feel a property should never be marked as “Coming Soon” unless it is truly being prepared for the market. As soon as the home is fully prepared, it should be listed in MLS as normal so it will be easily seen by all agents, and listed on all applicable internet sites so it can be seen by all potential buyers. We believe there should be rules established and enforced against “Coming Soon” listings for any other reason, especially if it is done to restrict access to the property to a firm’s own buyers.
In 2014 we sold 10 of 134 homes during preparation = 7.5%.
There are different, and strong opinions about how DOM should be reported for homes sold during this “Coming Soon” period. Some feel the “DOM” should actually be a NEGATIVE number, because the home was sold before it was fully prepared and before any reasonable expectation on the part of the seller. We at Hunter Rowe, and most sellers, like this viewpoint because all involved feel the home was sold “early”, and are thrilled when we can accomplish this since they often do not need to finish the improvements. Using a negative “DOM” is not a practical measure though, because it is hard to know when a home would have been fully prepared.
Others think the “DOM” should be counted from the first day any “Coming Soon” marketing is done, even though the home is obviously unprepared for sale. This seems unfair because the preparation time is usually not in the control of the listing firm. It depends on the condition of the home, and how fast the sellers do their part. If this method of measurement is adopted by MLS, most real estate firms will need to stop marketing homes while they are being prepared, solely because the measurement method would make them look unfairly bad at selling homes. That would be unfortunate for sellers and buyers, since “Coming Soon” marketing is such a positive for them.
When a home is sold during this preparation phase, MLS requires us to activate the home in MLS, then immediately mark it as “Pending”, which causes the “Days on Market” (“DOM”) to show as “zero”. We think this is a good compromise which adequately expresses the sentiment of the seller and the job done by the listing firm.
A different issue with homes sold during preparation is that there is no List Price (LP) established for the home at the time of sale. The list price depends upon (1) the extent of preparation done by the seller, and (2) the current state of the market when the home is fully prepared. Therefore, the list price and the sold price of the home is entered as the same number in MLS, and therefore the Selling Price to List Price ratio equals 100%.