Industry has phased marketing debate all wrong, paper says
A recent WAV Group white paper seeks to reframe the debate dividing the industry by comparing coming-soon and private listings to a company’s IPO preparation.
Key points:
- A recent WAV Group publication urges real estate professionals to think of coming-soon and private listings as preparing for the market in a similar way to how a private company readies for an IPO.
- Some MLSs have already adapted to the movement of more robust pre-marketing options at brokers’ requests, the paper noted — and others that do not act soon may be left behind.
- Amid the rapid advancements in AI already impacting the industry, WAV Group CEO Victor Lund noted that control over listing data is becoming even more important.
The real estate industry has become divided on the topic of marketing home listings: There are those who believe that private listings and coming-soons wrongly conceal information from consumers, and others who say that homesellers have a right to more flexibility.
But what if the industry is thinking about it all wrong? A new white paper published by WAV Group suggests pre-marketing strategies should be considered like an initial public offering — an idea that could impact some of the moral-leaning arguments that have been employed in the debate.
A step toward 'going public'
In the paper, WAV Group CEO Victor Lund argued that companies in the pre-IPO phase are much like listings being prepared for a sale. Both can be "fully functional" before going to market while maintaining privacy.
"What [a private company] is not doing is publishing its financial statements, its product roadmap, its customer contracts, and the interior of its operations on the open internet for anyone to index, analyze, and aggregate," Lund wrote.
"Private does not mean inactive," he clarified. "Private means not public."
Lund further argued that a private company preparing for an IPO takes thoughtful, deliberate actions — much as agents and sellers do before listing properties on the open market. It's after they go public that a regulatory framework stipulates what information is shared, on what timeline and with what audience.
Working within the cooperative
Although many in the industry see the use of private listings as a combative move against the MLS, Lund argued that these listings have a place within the MLS cooperative — and fit particularly well within MLSs with options to not display days on market or price changes that occur before going public.
Mandatory submission for all listings remains a requirement, Lund noted, "and the most compelling reason to participate." But agents today are rethinking the prevailing guidance that listings should be marketed in an all-access way — a shift that is causing friction with members of the old guard.
"None of the consumer-protection functions the MLS was designed to deliver are being interrupted," Lund wrote. "What brokers are doing differently is refusing to treat MLS submission as automatic authorization for public-internet display."
MLSs must move into the future
The white paper cited WAV Group's "Do Not Display on Internet" published last month, which suggested MLSs need to move forward with restraint to prepare for organized real estate's "ethical AI era."
Lund noted that several MLSs recently announced changes to their listing display policies "with the mandatory submission to the cooperative preserved and strengthened at the private end." MLSs have been moving in this direction for years, Lund added, and those that keep their head in the sand may be left behind.
"The rest of the industry can either move with them or be left operating under the legacy architecture while the strategic ground moves underneath," he wrote. As they face calls for more liberal pre-marketing options, he added, MLSs now have an opportunity to reclaim a role "as the primary venue for the listing's commercially active life."
Why the 'legacy architecture survives'
In traditional marketing structures promoted by NAR's Clear Cooperation Policy, sellers and their agents scramble to time everything correctly before putting a listing in the MLS. Once it goes live, dozens of syndication points automatically receive that listing's data.
If the listing doesn't sell at its initial asking price, everyone will know — and wonder why. But under a "Listing IPO" model, Lund argued, the seller would have more control over the timing of the market.
Most would choose this option if they knew it existed, he said. "The legacy architecture survives only because most sellers do not know they have a choice."
A call to action
Lund mapped out four main objectives for MLSs that want to move into the future.
First, he said, they should adopt the "Listing IPO" concept — both in policy and across all communications with brokers.
Second, MLS policy should be restructured to separate the decision to submit a listing to the MLS from the decision to authorize a listing for public internet display, he suggested. Authorization for syndication, AI use, data aggregation and advertising should also occur in different stages, with separate opt-in or opt-out agreements.
Third, Lund argued that listing agreements with sellers should be broken down to mirror the "Listing IPO" structure, with separate lines for sellers to opt in or out of internet display, syndication, AI training and more.
Lastly, Lund urged MLSs to directly engage brokers on revised participation terms. The MLSs that do not act within the next 90 days will be left to negotiate "from a position of structural disadvantage," he predicted.