If you’ve ever bought tickets to a concert, a smartphone or a luxury car, or visited your favorite department store, you’ve probably taken advantage of a presale. In essence, a presale allows customers access to inventory not yet available to the consumer base en masse. It’s a targeted approach many businesses take to generate buzz and interest before the product is officially on the market — and the formula works.
According to global consulting firm McKinsey, “Companies with strong presales capabilities consistently achieve win rates of 40–50% in new business and 80–90% in renewal business—well above average rates.” With more tech and luxury companies investing in presale business, I often wonder why this tactic isn’t being applied by more of our peers in the real estate sphere.
Here are three reasons why more brokerages should premarket homes to generate the best possible price for their sellers while building up interest among buyers:
1. More Transparency
Premarketing a home on your brokerage’s website actually provides more transparency because it gives the consumer a glimpse of what’s coming down the pipeline. Instead of quietly sharing the existence of the home as a “whisper” listing, and limiting the number of buyers to an exclusive select few, preselling helps to shed light on so-called shadow inventory and makes the marketplace aware that a home will soon hit the market without blasting it out onto the local multiple listing service (MLS) where it will be competing with thousands of other listings.
The National Association of Realtors (NAR) has drafted a policy recommendation to limit an agent’s ability to premarket a home under the guise of fair market competition. The argument is that once the home is marketed or advertised in any capacity, NAR members must make the listing available to all members of the MLS within 24 hours. But in my opinion, there is nothing fair about pushing a seller and their agent to market a home broadly, and this would result in more secretive whisper listings.
2. More Control
Real estate is an interesting case because the agents marketing homes don’t have control over the product they’re selling. Think about it: They usually haven’t constructed or lived in the homes, and they had little to no say in designing the homes, yet they are tasked with marketing the home for a fair price pegged to what the market dictates. Preselling a home before bringing it to market allows agents to help their sellers get their home ready for primetime through improvements and staging.
If someone wants to sell their home but it’s not quite in shape, or maybe the seller has personal reasons (such as a divorce) and doesn’t want to launch a full-scale campaign, a presale has the ability to make important information about the house known to consumers who are searching for that specific criteria. The only difference is with a presale, that information is readily available first on the brokerage’s website, and it gives agents and consumers a chance to test pricing and gauge response before going on the broader market.
3. A Value Add For Agents And Clients
Real estate agents are fighting an uphill battle every day as national listings aggregators and iBuying platforms try to chip away at their worth. Preselling a home is one way agents can work closely with their clients to market a home effectively and achieve the best price. According to the NAR, 44% of home buyers begin their search online; preselling a home through marketing it on the brokerage website not only raises awareness for the property, but it also boosts the agent’s value. Agents are the experts between before and after the home hits the market, and they can be clear and upfront about the property with any interested party that comes their way. In fact, buyer’s agents are among the greatest beneficiaries in a presale scenario because allowing them access to an ever-evolving pipeline database — no matter what MLS they are in — saves them considerable time and allows them to work with buyers from anywhere.
The way consumers shop and purchase has evolved, and the real estate industry has to do its part in meeting that demand. For example, people no longer buy homes to move closer to their work; many companies offer flexible schedules and remote opportunities. The internet has leveled the playing field, and consumers have access to a wealth of products where they can compare pricing, shipping rates, delivery dates and so on.
Real estate has not caught up to this shift yet, but preselling homes for the benefit of buyers and sellers is one way to revolutionize and modernize the industry. There is nothing sinister about showcasing a home before it’s officially on the market — it’s opening the market to a future contender, another product to compare, contrast and deliver on for the modern, savvy consumer.