It’s Probably Not What You Think.
(Lake Tahoe Real Estate Blog, December 28, 2009, by Richard Bolen)
We originally posted this on February 9, 2008. We've brought it back because we think it noteworthy.
We see them all the time. Online they’re everywhere, and in real estate print advertising too. But has one ever really considered what a “Featured” Listing is? What it really means? The process of how they happen? We thought it’s worth exploring... because featured listings are a dime a dozen and usually have about the same value as fools gold.
The idea behind the “Featured” listing, you know, what one is supposed to represent, or have you believe, is that it is something special. Like it’s a super star of a house, or a breathtakingly good deal. But are featured listings true celebrities of the real estate realm?
While sometimes they can be star material, it is exceptionally rare. Most of the time featured listings are not; there is nothing special about them at all. Advertising fodder, that’s what they are. And below B-movie grade at that.
Featured Listings on Websites in General :
One finds featured listings most often on real estate websites. They’re on brokers sites, on individual agents sites, and featured listings are also found on well known search sites, such as Realtor.com. So lets see what it takes to get a listing featured on each.
Featured Listings on Broker Sites :
- Some brokerages have them, ours doesn’t.
- Featured Listings on a brokers site are only listings that the brokerage has.
- The brokerage may specifically select their exclusive listings that they want to feature.
- Or the brokerage may get an automatic feed from their MLS (multiple listing service) that randomly selects homes listed by the brokerage only.
- Other than being able to demonstrate to a seller that their listing is “featured”, there is nothing else special about it.
Knowing this, if you were a real estate agent, would you pay special attention to a featured listing on a brokers site? We don’t. It’s in overall market knowledge, and searching out the details, where the nicest houses and the best deals are found.
Note: Make sure you read about Agent Behavior further below!
Featured Listings on Agent Sites :
- Most agent websites have them, our blog doesn’t.
- Featured Listings on an Agent site are only the listings that the agent has.
- The Agent’s listings are selected at random by an automatic feed from the MLS (an “IDX” feed).
- It is not possible for this automated selector to pick specific listings that the agent has, or the nicest house, or the best deal...etc.
- Other than showing a seller that their listing is “featured”, there is nothing else special about it.
- What’s special about the feature is nothing more than “these are all of my listings.”
- Featured Listings an an agent’s website therefore only means “these are mine.”
Again, if you were a real estate agent, would you pay special attention to a featured listing on another agents website? (This is important as it ties into normal agent behavior as discussed below.)
The Well-Known Real Estate Search Sites : (such as Realtor.com)
Many of the national real estate search sites have featured listings.
- Realtor.com is one of these such sites (they call it “Featured Homes”).
- There are Featured Listing “slots” available for each real estate market across the country.
- These Featured Listing slots are sold to an Agent for a monthly fee, but on an annual contract.
- There may be multiple featured listing slots for each market:
- South Lake Tahoe, CA has 16 of these slots.
- Stateline, NV has 8.
- The monthly cost varies by market area:
- It costs approximately $330 per month per slot for South Lake Tahoe, CA.
- It costs about $250 per month per slot for Stateline, NV.
- We had up to 3 such slots for featured listings on both sides of our market for the last 3 years.
- That cost us about $900 a month during that time.
- We have not had one phone call, or email, or Buyer contact us from any of it.
- We have since canceled each our slot as its annual contract expires.
- One is still running (in South Lake Tahoe, CA).
- It too will be cancelled when that contract expires (Realtor.com refuses to cancel it until then).
- The only benefit we ever got from Featured Listings here was to out it in our listing presentation.
- Sellers liked the idea of the “increased” exposure they would get for their house.
- But the increase exposure has produced nothing of consequence over time.
- And we now disclose that to all of our Sellers that... because it’s the truth.
ABOUT AGENT BEHAVIOR... and Featured Listings :
It’s important to know this and understand what it means: about 85% of all Home Sales are sold by an agent other than the Listing Agent.
- That’s right! 85% of home buyers have their own agent.
- 80% of all home shoppers start looking first on the internet.
- When they find something they are interested in, Buyers then contact their Agent.
- The Agent then starts looking for the client.
- Because real estate agents understand what a featured listing actually means, they rarely if ever (we never do) look at them.
- The bottom line is featured listings do not sell houses.
Featured Listings in Print :
They are essentially the same as featured listings on an Agent website.
- They are always a listing that the advertising agent has.
- They make the Seller happy of the house that is featured.
- They are also used by the agent to promote getting other listings.
- Other agents rarely ever pay any attention to them (most never do).
- There’s usually little that’s special about any of them, other than that “this is mine”.
- And they do not sell houses either.
See original article The Truth about "Featured" Listings on our main blog.