WHY OFFER BUYER AGENTS A BONUS FOR A FULL PRICE OFFER?

WHY OFFER BUYERS AGENTS A BONUS FOR A FULL PRICE OFFER?  Do you ever see listings in your MLS with this information.  Every once in awhile we will have a listing here at Lake Anna with this little tid-bit in the remarks.  I can see that might be an incentive to a sub-agent of the listing agent and it certainly something that a dual agent might Lake Annalike to have, but a buyer agent???

Seriously, how can a buyer agent be tempted by an offer like that?  After all, as buyer agents our responsibility is to try to get the best sale price, along with other favorable conditions, for our client.  Full disclosure means that I have to say there have been a few, and that means very few, times that I have written a full price offer.  Multiple offers is one instance where I might suggest that.

How comfortable would you be revealing to your client that you are suggesting they write a full price offer and it really has nothing to do with the fact that it is the only way you would receive this bonus?  How believeable would that be to your client?

It really puzzles me when I see that type of bonus.  

  • Is this something that sellers think of or do some listing agents suggest it?
     
  • Have you ever offered it on one of your listings?  If so, why?  
     
  • Have you ever received a bonus like this while representing the buyer?  What were the circumstances?
I'm just wondering if it is ever appropriate and if so when.  I realize that often incentives are needed to move a property but I've always thought that the best incentive is the right list price.  Sometimes it takes a little bit more to get an offer but I believe the party that should be encouraged is the buyer.  After all, they should be the final say as to when an offer will be made on a house and how much it will be.
 
The best bonus you can give a buyer agent is a house that is well priced and in very good condition.  That is what attracts buyers and makes our job so much easier.  Make your house competitive.
 

 ©Copyright Kate Elim 2015

+++++++++++++++++++++++++++++++++++++++++++++++++++

GET MOVING WITH KATE!

540-226-1964 cell

lakeanna.kate@gmail.com

For easy property searches check out my web sites: katesellslakeanna.com

or

lakeannacountry.com

Comment balloon 17 commentsKate Elim • November 20 2011 09:09PM

Comments

At the least, it should make the buyer agent re-visit the comps to determine value rather than just follow the buyer who requests, "let's offer them 30 percent below asking, just like they showed on that infomercial."

Posted by Michelle Carr-Crowe Just Call 408-252-8900 Top 1%!, Family Helping Families Buy & Sell Homes 40+ Years (Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty) about 7 years ago

I have never offered on these.    I do not let such things influence me.  I will always claim a bonus if I can get it but I have only received bonuses for selling Fannie Mae properties...

Posted by Debbie Holmes, Gets the job done! (Gold Key Real Estate) about 7 years ago

I have seen incentives offering "x" amount of dollars to the seller broker but it is usually if the deal closes by a certain date, not for full price.

Posted by Malinda Montgomery RSPS AHWD-Realtor (Adams Cameron & Company) about 7 years ago

My answer to your 3 questions:

 1.   The Listing Agents suggest it.

 2.    Yes, I have Offered Bonuses.   It increase the number of Showings, just like a "Large" Selling Side Commission will increase the number of Showings. 

  3.   Yes, I have Collected Bonuses.   The Circumstances?  It was Offered in the MLS; I was paid at Closing.

  *  If I offer a Bonus, it is to the Selling Agent.   It does not matter if that Agent is a Buyer Broker, Transaction Broker, or has No Agency Relationship. 

 

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 7 years ago

Hi Michelle...It's recommended that buyer agents do that whenever the buyer wants to make an offer.  I like buyers to see the comps so that they will be realistic with their offer.  Even if they choose to be a bit too low at least they will know to expect a counter.

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Hi Debbie...I agree with you.

There have been a couple of times that I have earned a bonus and accepted it but it has never been because I urged my client to pay full price.  That would seem like a conflict of interest putting mine ahead of the buyer's.

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Hi Malinda...That's something I've seen numerous times also and is pretty reasonable to me.  There are times the seller wants to move forward and is willing to pay to get it done by a particular date.

I'm glad you are not seeing the type of offer I'm writing about.  I believe it puts the buyer agent in a position where they may be tempted to steer their client into offering full price when it's not warranted.  I know that should not influence the agent but it might.

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Hi Fred...I'm wondering if you understood my question. 

I was not questioning the efficacy of offering a bonus by the listing agent nor the acceptance by the selling agent.  However, when the offer is only good for a full price offer I think it tempts some buyers agents to influence their client into making a full price . 

In my area, in the current market, there are very few properties that cannot be purchased for less than the list price.

I made the distinction between the buyer agent and the other forms of agency because the buyer agent has a different responsibility to the buyer.  At least if they are doing their job.

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Kate,

See them often.


I’m betting that 99% of the time the agent mentions it.

I don’t do it. I think it weakens the listing agent’s negotiating power from the start.

You asked “Have you ever received a bonus like this while representing the buyer?  What were the circumstances?”

I ALWAYS disclose such special circumstances to my buyers. If anyone will benefit it will be my buyers not me.

Having said the above, a recent post by our own Brad Andersohn may make us all re-think “special offers.”

http://activerain.com/blogsview/2605512/seller-incentives-increase-buyer-contacts

Posted by David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation, Relocation, Luxury & Lifestyle residential (Colorado Real Estate Advisers LLC ) about 7 years ago

Hi again, Kate.    Thanks for clarifying.

    I agree with you.

    A "Bonus for a Full Price Offer" to a Buyer's Broker is a Conflict of Interest.

 

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 7 years ago

Hi David...Thanks for your comment. You've got the right attitude as a buyers agent.

I'm going to check out Brad's post.  I'm sure it will be informative.  Thanks for letting us know about it.

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Hi Fred...Thanks for your follow-up comment.  Recognizing when there is a conflict of interest helps us avoid them.

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Kate, it's been years since I received a bonus, but I certainly would disclose to the buyer that there was a bonus.  They usually wanted to use it as their closing costs instead.

Posted by Kay Van Kampen, Realtor®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX Solutions) about 7 years ago

As a buyers agent I rarely write a full priced offer. Incentive smentive- It's the buyer who I respresent.

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) about 7 years ago

Hi Kay...Most buyers would hope to have the bonus to help them out and it's best they know when one is offered.

Kate 

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

Hi Ellie...Easy isn't it when you live up to your role as a buyer agent.  

Kate

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) about 7 years ago

I have offered and recieved bonuses but when you do something like this you find agents that may not have their clients best interest in mnd.

Posted by Andrew Monaghan, CRS, GRI, EPro Associate Broker (Your Phoenix Home Source) about 7 years ago

Participate