That helps somewhat but only from an agents standpoint. That means that other agents need to be aware of the bonus. Usually in listing notes in the MLS.
The home needs to be marketed as well. Yard sign, websites, print publications etc. Specifically, you need to get the word out about the property to as many potential buyers as possible. Open houses help too but people need to know about the property.
The Internet is playing a larger role. More and more people everyday start their search on the Internet. The home should contain multiple pictures and a virtual tour.
If your agent hasnâ€™t done so already, be sure that they have taken multiple pictures of the property and that they are loaded in the Multiple Listing Service (MLS). Ask your agent to show you the listing.
If they have taken pics be sure that they are updated. Itâ€™s not in your best interest if the pictures of your property reflect the length of time it has been on the market.
I am in New England and still see listings with snow around the property. Today it is in the 90â€™s/ This shows buyers and agents that your home has been on the market for a long time.
Hope this helps!
Shoreline Property Specialist
Coldwell Banker Residential Brokerage
I think Jim makes an excellent point by considering the bonus as an indicator of a sellers motivation to sell. When I see a bonus offering come out after a property has been on the market, I immediately look to see how long it has been on the market and why it didnâ€™t sell. I become immediately suspect of price, and look at the marketing efforts on behalf of the property. Although I would never interfere with anotherâ€™s listing, I sometimes have had this fleeting urge to call and say, â€œDonâ€™t ask the seller to pay more fees, lower the price and do better marketing!â€ Buyer bonuses offered on day one speak more clearly about seller motivation. Bonuses which come as an afterthought speak to low activity or interest from the market.
A buyers agent owes his/her complete loyalty to the buyer. The intended purpose of the bonus is to ask the buyer agent to consider this house for sale above others. This is inherently contradictory to the fiduciary responsibility of the agentâ€™s obligation to put the buyers needs and interests above their own. How do agents purport to be the buyers advocate when they are choosing properties, or talking them up, based upon a self-serving gain? There will be agents who will not be affected by the bonus offering and will retain focus entirely on the buyer needs. There will also be those agents who will be affected. When you are the seller, this may please you. If you were the buyer, would this please you? As a buyer, how would you feel knowing that your agent is showing you property based upon a bonus and not what your needs are?
Bonuses are less influential when the base compensation that a buyer agent will receive from any property that their buyer purchases is stable and fair. If an agent is taking a cut elsewhere, there might be greater temptation to be influenced by a buyer agent bonus. One example: When buyer agents will be required to pay a large portion of their commission to a lead referral source, the temptation to replace the lost income might increase. Again, it depends upon the agent. Think of a salaried employee at a job when passed over for a raise, or worse, given a pay cut. Does that employee focus remain on doing a great job, or is their attention diverted as a result of their perceived loss?
Sidebar Note: Overall, I discourage buyers from using online referral services, or services that promise high dollar gift certificates from home improvement stores. Those services work like this. The agent pays a large portion of his/her commission to the referral source. If a gift certificate or rebate is involved, it comes out of the agents gross commission, although it bears the name of the referring company as the giver. The agents chosen by the referring company are chosen based upon their willingness to agree to the financial terms, not their skill, experience or ability. The buyer may get a good agent, maybe not. As a seller, you are not in control of this. Just a sideline explanation on other factors the impact buyer agent net compensation.
Second Sidebar Note: Agent to agent referrals are great. While we share compensation in the form of referral payments, our chosen referrals are predicated upon belief in the agent and the best interest of the client. What we forfeit in income for incoming referrals, we likewise make in outgoing referrals. This is a win-win-win, for the two agents and the client.
BOTTOM LINE RECOMMENDATION: Be competitive in every aspect and stay away from bonuses. Offer a competitive buyer and seller agent compensation from day one. Donâ€™t cut corners on compensation, pay competitively for your market. Price your property competitively. Pursue, through your agent, a competitive marketing campaign that communicates to both the brokers and the public that your property is available and that you want to sell. Allocate the extra $1500 in a price reduction, or increased marketing, assuming the base compensation to the buyers agent is already competitive.
Finally, make sure your home is presented properly. Do you have professional photographic images online? Is it staged correctly? Priced correctly? Make sure all these areas are covered well.
I know Aliquippa very well, and my opinion is that if you are wiling to give up $1500, take it off the list price, because in your neighborhood, buyer's will be setting up their searches based on price, and buyers are pre-qualified according to the price of the house. If a house is priced at $66,000 and a search or pre-qualification is $65,000, your house will be missed.
There are SO many houses for sale in Aliquippa, that is very important that your house be in "show-shape", sparkling and uncluttered.
Looks like you have gotten a lot of great responses. I hope you are getting the answers you are looking for. I agree that raising the selling commission is a good and sometimes more obvious than a bonus which sometimes is missed on the mls. There are some fun and creative ways to get traffic. I have had people hold a party or host a fundraiser at their home to generate traffice.
I was hoping to learn a little bit more about your query from my earlier post. In view of some of the other responses, I will leave you with this thought.
It depends on your market.
For example, in Glendale, my little town of 210,000, there are about 450 listings. Depending upon the price point and type of home, there could be 20 -40 properties in a given price range that might fit a buyer's needs.
Depending upon the way a Realtor uses the MLS (and most MLS systems are different, there is not one 'standard", it could be that although the bonus is helpful, it may go unnoticed. Selling office commission WILL be noticed.
In Lancaster ( a town about an hour away), there is a lot more inventory...like 200 three bedroom homes under $200,000. Imagine competing with 100 other properties!)
I'll give you a real life example. There was a family in an adjoining community that wanted their children in a certain high school So they moved and RENTED a townhouse. They put their home on the market in August. Over the next five months this is what happened (remember, they were renting AND paying a mortgage).
The price adjusted in September. October, commission went to from 2.5% to 3%, then in November went to 4%, in December 5% plus $5K bonus if the buyer closed by Christmas. The house sold for about $650K.
Generally speaking increasing the selling office commission is less costly than a price reduction. When there is a lot of inventory, the key to getting a home sold is to get the Realtors' attention. If they have a lot of inventory to sort through, they need help.
Good luck to you. Hope all of this advice is helpful!
Here is the key part to make the bonus work more effectively. Every state is different. In Maryland, a "bonus" must be disclosed to the buyer when a buyer's agent earns it. However, a higher commission does not need to be disclosed. Therefore, for my listings I will put the extra money towards a higher commission. In our MLS we have the opportunity to write comments to the showing agent. This is the time I remind them they can make more money if they sell the listing.
Remember, as a seller, real estate agents are your sales force. Motivate and reward them and results will come. I do want to be clear, not all Realtors are motivated by money. They should have their clients interest first. And if they do, their business will grow through referrals like mine has. So, a bonus is not guaranteed to sell your home, but it certainly does help!
I do not know your market, so if you don't mind a few questions:
What is the listing price of your home?
Could you please characterize the commission offered to the selling office (for the buyer's agents)
Do you know if the selling office commission (SOC) is average, above average, or below average?
Generally speaking if one was ranking the tools that sellers have to help market their homes, I would rank order them like this:
1. Selling office commission
2. Price right (meaning if a property is over-priced, but also at above-average commission, Realtors will probably show it more..it's like being two jobs, the duties are the same, but the pay offered is higher on one of them)
3. Selling bonus (your question)
4. Sellers assistance with closing costs/assistance with buying down the interest rate
5. Accessibility (how easy it it to show)
6. Condition of property
Hope this helps. Look forward to hearing more.
Just as importantly to me. It tells me that the seller is motivated to sell, not just "testing the waters"
It tells me that the seller has a smart listing agent.
It tells me that the seller might be willing to do what it takes to get it sold, negotiate in good faith and do what is reasonably expected of a seller such as obtain a roof certification, a clear pest report. and maybe go the extra inch or two.
It also tells me that if I have to kick something in myself, such as a buyer home warranty, that it doesn't have to come out of my base commission. It just comes out of the bonus.