Profile picture for angel549

"Realtor Bonus" good idea?

Ok. I plan on removing my condo off the market by August 1st if no offer. It is listed correctly price wise, and the ONLY thing selling in the condo community of condos is trashed out short sale forclosures (for around $149,000)

 

I spoke with my agent this morning and her idea is a realtor bonus. It just seems so crazy to offer MORE money to these realtors than they are already getting. If it is so slow, why aren't they pushing for any sale they can get?

 

Quote by my realtor: "A realtor bonus is basically a selling bonus for the agent who brings us a buyer. It would be paid at closing and the best way to pay it is in the form of a visa gift card. This is attractive to a lot of realtors because with things being slower, realtors take in to account how much they can make on a sale before they show it.

For instance, we are co-operating at 3% with other agents. We get a lot more showings than someone in the same community that is co-operating at 2% or even 2.5%. We would likely get even more activity if you co-oped at 4%. So if you would be willing to to that, it would generate the most activity without reducing your list price (of course your net proceeds would be reduced by about $1,700 though).

It's a great tool because instead of reducing the list price to $175,000 which would be of minimal difference to a buyer, we are increasing the profit for the realtor and they are very likely to try and show your home more and push harder to get it sold- Either way, their job is the same, but they will make more money selling your condo. I know it's a shame, but that's how it works!!"

 

What do you think? Should I give this a try until August? Has anyone tried this, and if so did it work? Or did it just cost the seller more out of pocket?

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June 27 2008 - US
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Profile picture for Mikal1

I'd tell my listing agent "Great idea!  But it's coming out of your side of the commision!"  My net would remain the same.

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June 27 2008

angel549

 

If you are offering a fair co-broke fee, there is no need for a bonus.

 

The buyer is the person who decides to make an offer on a property that fits their needs and desires best. An agent can not force a buyer to make an offer on a property, no matter how much they are being paid.

 

Your best bet to sell your property is to price competitively for your market. 

 

When buyer's are shopping for a property, they typically do not confine themselves to one subdivision or one complex.  So your pricing should take into consideration all competitive properties your buyers may be considering.

 

Best of luck on your sale

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June 27 2008
Profile picture for Alan May

In my opinion, Realtor bonuses are ineffective and unnecessary.  We are well paid, for what we do, and don't require any bonus.

 

For my part, any bonus that is offered, over the average co-brokerage fee in the area, I turn over to my buyers.  Buyer bonuses DO work.

 

But I've never shown a property, simply because they're offering a bonus... I've never had a buyer consider a property, simply because it would pay me a bonus.  If your home fits my clients parameters, I'm going to show it... if it doesn't... I won't.  Period.

 

Save your money (unless, as Mike suggests, your agent wants to pay it out of HIS side), either reduce the listed price by the "bonus" amount, or offer a closing bonus to the buyer, if under contact by July 20th. (or whatever date works best for you!)

 

Good luck.

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June 27 2008
Profile picture for klarek the realist

angel549, fire your agent.  Now.

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June 27 2008
Profile picture for mckylie

Whether it's effective or not - that money should not come out of your pocket!  If the Realtor thinks it's such a great idea then they should be offering it!

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June 27 2008
Profile picture for klarek the realist

I believe I have said this before, but if I were a buyer and I found out that the house my agent had strangely been hyping was offering him a bonus commission, I would c*ck punch him then fire him.  Then I would stand in front of the house for sale day and night and let every prospective buyer know that their agent is getting a bonus if they buy that particular house.

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June 27 2008

I disclose all such bonuses to buyers, usually giving them as a credit to closing costs...

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June 27 2008
Profile picture for mckylie

That is very ethical of you Rob!!!  I wish everyone was that honest!

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June 27 2008

"I would c*ck punch him then fire him"

 

LOL - gets me every time!

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June 27 2008

Yes, actually, it can work.  Agents will not sacrifice their ethics over a small bonus, but they might just squeeze that extra 10 minutes in to show your property when they otherwise might have run out of time.

 

I don't know about the VISA thing - any cash they collect must go through their brokerage, and it must be on the HUD.  Anything else is a violation of RESPA.

 

Here's an opposite idea, and this one is MOST effective, but more costly - lower the price to compete with the foreclosures, and reduce the commission to compete with the foreclosures. Ask your agent to show you from the reports what other sellers are offering.  If you are right and your price is correct, no worries, it will become a competition and the price will go up. 

 

The market will ONLY bear what the market will bare.  If your house isn't selling, and it is being promoted, then you haven't demonstrated to a buyer that your home is worth more than those ratty foreclosures.  They don't agree with you. 

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June 27 2008
Profile picture for fourier2020

<sniff, sniff> What's that smell?

 

If I were you, I'd SERIOUSLY consider getting another agent. What goes around comes around. The only problem is that most HONEST agents have more work than they know what to do with. Want an example?

 

Ask Elvis how busy he is now. I'm guessing that azrob has also got his hands full, although his blunt manner probably costs him some business.

 

You might also want to consider FSBO if you can't find anyone worth a darn. Anyway, good luck.

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June 27 2008
Profile picture for Alan May

Ask Elvis how busy he is now. I'm guessing that azrob has also got his hands full, although his blunt manner probably costs him some business.

 

Pretty busy...  I just did a marathon Friday/Saturday this weekend showing a couple relocating from California (nothing to sell), did the same last weekend for a couple relocating from New York City (nothing to sell), and fully anticipate both of them writing an offer in the next week (or so)...

    Sold a SFH here in Evanston, a condo in Lincoln Park and a SFH in Highland Park all in the last few weeks... busy.

 

I don't discount. I'm a full-price agent, full-service.  And yes, I'm honest with my clients about the potential future market... in fact I often talk myself out of good sales, because I want my clients to be happy with me and their purchase, and willing to recommend me in the future.  They won't do that if they feel even the slightest hint of impropriety.

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June 28 2008
 
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