Zach, Home Seller in Academy/Sherman Park,...

Does offering a finanical bonus ($2,000) to the buying agent really work? Do you feel this is ethical?

Asked by Zach, Academy/Sherman Park, Saint Louis, MO Thu Jun 5, 2008

Does offering a finanical bonus ($2,000) to the buying agent really work? Do you feel this is an ethical practice?

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Adding another vote. Bonus incentives do little, or nothing, to increasse offers. It is ethical to pay a buyer agent more $$, but as a listing agent, my guidance to a seller is to pay the amount necessary for results, but not more.
2 votes Thank Flag Link Thu Jun 12, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Offering it is ethical, but needless. Steering a buyer to it is not (just my opinion). Personally, I do not like agent incentives, because there are agents out here who can steer their buyers to them. But those agents would not hesitate to show a property that did not offer an agent incentive, hence they are pointless.

As a listing agent, I prefer to suggest buyer incentives. They help differentiate a listing, increase the pool of potential buyers (especially for properties priced in the range in which first time buyers are buying), and strengthen my seller's bargaining position.
2 votes Thank Flag Link Thu Jun 12, 2008
Zach,

Ultimately whether or not a buyer's agent bonus works or not is really up to the buyer's agent. Some agents will show properties with a bonus first and there are also some agents who will work harder to sell a property with a bonus.

It is absolutely ethical for a seller to offer a bonus to the buyer's agent. A seller is trying to sell a house and to that accord anything to entice other parties would be within thier right. It really comes down to good marketing, your job is to make your house the most desireable to agents (to get more showings) and to buyers. The ethics of the buyer's agent however is a little different. As long as that agent is not placing thier desire for a larger commission above the needs of their sellers, they should be okay.

Neither state law, nor the Realtors code of Ethics specifically prohibits a seller from offering a buyer's agent bonus.

In the end you might be better served to reduce your price by $2,000 because the buyer is the one who ultimately makes the decisions and money in their pockets go much further than money in their agent's pocket.
2 votes Thank Flag Link Thu Jun 12, 2008
As an exclusive BUYER agent, I couldn't agree more with my respected colleagues here. Offering incentives to the BUYER agents makes no difference whatsoever! It's the buyers choice on what house they're going to buy. If the house is great, if it's not, it's not. If my buyers want to buy a house that pays out 2.5%, then that's the one we're going to offer on. Please don't exhaust your resources by overpaying to the BUYER'S agent. Good luck!
1 vote Thank Flag Link Fri Jun 13, 2008
As Jim pointed out, it's pointless.
1 vote Thank Flag Link Thu Jun 12, 2008
I concur that buyer agent incentives are unnecessary. The agent MAY control which properties are shown, but the buyer ALWAYS makes the final decision to purchase. Rather than try to incent an agent, put your bonus money into fixing or enhancing the property. You may have feedback that will help you focus your efforts or a good listing agent will advise you whether to offer a buyer incentive (ie offering to pay some portion of the buyer's closing costs, making a change to the property, or a price reduction) will be most effective in your case. Best wishes.
1 vote Thank Flag Link Thu Jun 12, 2008
Not sure how anyone could say that it does not make a difference. Banks are doing it, the biggest construction companies in Minnesota are doing it and 15-20% of sellers are doing it. If it did not work why would all of those companies be doing it. I am sure that the builders and banks see that it works so they keep doing it. I tell every seller they should do it. If it does not work, they are out 1% or less, if it does work and they sell, they may have saved a 10-20% loss. I can show you the statistics on sold home that paid out higher if anyone wants to doubt this. E-mail me.
Web Reference: http://www.NieceHomes.com
0 votes Thank Flag Link Wed Jun 18, 2008
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