I have no doubt that there's lots of opinions on this subject on both sides. And there's pros and cons both ways. But since I'm a data geek, I tend to try and let the data guide my opinions. Here's some data that may shed a little light on it.
I ran an analysis of just under 40,000 transactions in and around Riverside California from 2018-2019 (from the CRMLS - California Regional MLS). In this data, homes that were marketed for several days before they were officially listed sold, on average, for close to 1% more than homes that were not pre-marketed (0.8% to be more precise). Here's the actual numbers (in the format days of pre-marketing: difference in sale price):
- None: 0%
- 1-3 days : +2.1%
- 4-7 days: +1.2%
- 8-15 days: +0.4%
- 16-21 days: +0.9%
- 22-30 days: +0.6%
- >30 days: -0.3%
So on average, homes pre-marketed for less than 30 days, which are ultimately listed on the MLS, sell for more than those without. The optimum pre-marketing time is less than a week, but it's not zero, and the price increase of 1-2% for 1-7 days pre-marketing is significant. Obviously this is just within one area, but the analysis I've done in other areas with smaller data sets confirms this - pre-marketed homes sell for more money, on average, than those that aren't marketed before they hit the MLS.
And that's just price. The effect of pre-marketing is even more pronounced on the success rate of selling a home. The success rate of selling homes which were pre-marketed for 4-15 days was 9.7% higher than the success rate of selling homes which were not pre-marketed at all. What that means is that listings which are not pre-marketed at all were about 10% more likely to either be cancelled or to sit on the market so long that the listing contract expired.
So overall, while this change may have been popular with realtors in the NAR (although my wife is an NAR member and was never asked about it...), it's likely to actually work against home owners and agents - and even the market as a whole, since it will ultimately suppress prices. The good news is that the effect on the market as a whole will be minimal, since only 2.4% of listings (about 1 out of every 40) in my analysis were pre-marketed at all.
To those concerned about conflicts of interest, I think you're right, but I think when we talk about pocket listings and coming soon listings, those are often two different things. True pocket listings never get listed, and I think there are sometimes some conflicts of interest there that ultimately are not in the seller's best interest. Of course, since these are never actually listed, it's hard to get good data to look at these to confirm this suspicion.
However even if you could completely ban pocket listings without banning pre-marketing, that would not be without its own problems. Sometimes the reason a home becomes a pocket listing is because the home owner explicitly does not want their home publicly listed. There can be many reasons for this, but one fairly common reason is that they don't want their neighbors or family to know they're selling. If the new rule prevents this, it will be a loss for both these home owners and the agents who they contact. Again, this is a very small percentage of sales, but it suggests that the new rule may be a little too heavy-handed in its approach.
