Incentive for Realtors

[JSR22]

Did any of you offer an incentive for a realtor to sell your house. How much was the incentive and did it work.
Thanks

[graciegirl]

No. We thought the big chunk of change was enough. I think six percent in Cincinnati, or was it five?

Bill of Bill-n-Brillo gave us this exact advice;

"List it as LOW as you can stomach."

Worked.

Sold in nine days.

The one in Hadley wasn't listed. Some nice folks talked us into selling it to them.

[CarGuys]

I had to get out the Maalox as we Sold' or should I say Gave away our home to a nice young couple with cute kids. Made it easiser.

I tried the make a huge Profit Route and sat on it for four years. Started lowering it till the stomach hurt and bang it went.

The we bought the lot built got broke but also got Happy to soon be Villagers.

H

[momesu]

Nope didn't give my Realtor any extra incentive. Simply took her advice as to what the market would bear in the area my home was and the size it was. Priced it $5000 over that price to have some wiggle room and got a full price offer in 4 days. I am ecstatic that I am no longer a MD home owner! Same model home right around the corner is priced much higher and has been since January. They are still waiting to get the price and while they do they are paying on two mortgages........never did understand that logic. (oh and we are both original owners who lived in homes for 28 years).....I still got plenty of profit just not what I might have got 8 years ago.

Suzanne

[Posh 08]

I think it is unlawful to give "incentives" beyond the contracted percent. If not unlawful most likely against ethics.

[shcisamax]

Paying a realtor an incentive is not good value. You are much better off lowering your price which will draw the buyers in your direction. The house is what sells the house not the realtor. Buyers are very savvy now and know what they want. A realtor can do little other than point out its positive characteristics. But if it isn't the house a buyer wants, there is nothing the realtor can do. And in this market especially, value is the key to selling your house. If you are priced below your comps, you will sell.

[missypie]

I really think it depends what kind of a mkt you are in , in the area that one is trying to sell. Our neighbors offered a $2 grand incentive to the reraltor that sold the home. They had many showings triple what other neighbors had. Did that help to sell the home faster? Who knows.

[TrudyM]

Realtors get paid alot for little work on some listings and work alot with some buyers and sellers for not much on others. So those who have priced their homes right and staged them correctly and Those who do their research and know what they are looking to buy so as not to waste anyones time, end up paying for those who keep realtors running around showing listings when they are not really ready to buy or can't afford what they want.
I also hate realtors who don't preview the listings to see if they match what their customers are looking for but just drag them all over looking at whatever looks good on the MLS. A person can do that kind of search themselves with the internet. I found the last two houses we bought on the internet and the realtor spent a total of 20 hours showing us listings and negotiating the contract (after I fixed it) and for this he got 10 thousand dollars (1/4th of the commission). The commission on my house will be around 50 thousand dollars and it just kills me to pay it. My neighbor down the street had been brought three contracts on her house before they got one that closed because the realtors brought them buyers who didn't have the down to qualify for it.

In this climate people are finding they can't qualify for as big a mortgage as they could previously as the rules are tight again more like in the early 70's.

[JSR22]

My house has been on the market for 3 weeks and we have had 10 showings. My house is staged and priced competitively. I did not offer an incentive for a realtor to sell the house. The reason I asked is I know someone who had their house listed for over a year and several weeks ago offered a $2,000 incentive. The house went under contract last weekend. I am just curious if offering an incentive was becoming "normal".

[Billyworld]

I have a Real Estate license and have a suggestion that I know works. Rather than dropping the the commission, there are two ways to go. First, set the commission rate at 7% at the listing. Give the listing agent 2.5% and 4.5% for the selling agent. If your property is already listed, raise the commission to 7% giving 4% to the selling agent. Your listing agent won't like this but tough beans. Tell them if THEY sell the house, they get the full 7%. See, basically, Realtors are lazy and greedy. Picture this. You are working with one buyer and only one buyer that will buy a house. That is your only paycheck you will get for some time. If you can sell a house with a exta one or one and a half percent commission, which one will you show? As for Realtors getting rich, thats not true. On a $200,000 house with a 6% commission, here is the breakdown. Selling agent, $6,000. Buyers agent, $6,000. Most agents get 50% of that. Now that comes down to $3,000. Pay the govt 25% and you have $2,250. It costs approx $1,400 for board membership and multiple listing membership. You pay your own advertising, phone and fuel and pay extra money on your car insurance. Catch my drift?---Thats why I give it up. I hope my "splainin" makes sense.:doh::doh:

[jeffy]

My son and i flip a lot of homes in the Washington DC area ( where he lives ).

He has his RE license ( i let my license lapse ) so that saves us on the sale and he gets the commissiion on the purchase. What we do is put the following in the remarks of the listing.

"$3000 bonus to buyers agent for any contract closed by ( we usually put 60 days from todays date as most closings take 30 to 45 days).

If it doesnt go under contract in the next 3 weeks, we will again extend the time deadline.

Understand that what usually sells your home is NOT your agent but putting it into the MLS and advertise to thousands of agents that your home is available. You will get a lot more showings ( especially on lower priced homes if you include this incentive )

jeff

[duffysmom]

Since there were so many houses similar to ours in price and location we asked that a note be added to the multiple listing indicating that the selling agent would receive a $1,000 bonus. That gave agents the incentive to show our home first. The showings did pick up and we sold rather quickly after the notice was posted.:) Good luck...

[Posh 08]

I emailed my agent about including a bonus in the listing. Waiting for a response.

[uujudy]

Wow! I've never heard of this! Is it really OK, legally & ethically, to give a kickback to the realtor? Now I have some serious thinking to do, since we still have a house to sell.

[Posh 08]

Wow! I've never heard of this! Is it really OK, legally & ethically, to give a kickback to the realtor? Now I have some serious thinking to do, since we still have a house to sell.

I'll let you now when I hear back from mine.

[JSR22]

I know a number of people who have offered the incentive. I am not an attorney but I can't understand why it would not be legal. You can negotiate the commission percentage. Why not add to it? I have not done it but our house is only on sale for 3 weeks and we have had 10 showings. If we don't get an offer by mid May I would consider an incentive.

[shcisamax]

No it is unethical. If you are working for a buyer, it is your obligation and duty to show them everything that they are looking for. It is also your duty not to steer them to a particular property. You are working for them and your loyalty is to them not to yourself. That said, there are a lot of realtors who would gladly push/sell you a house of their choosing if it means more money for them.

[JSR22]

My realtor does not like the incentive offer. She felt it would be smarter to mark down the house $2000. Yes, ther are are realtors looking for the incentive but I have decided that it is not something that I will offer.

[shcisamax]

NSR: Anyone that has joined the NAR, the National Association of Realtors, has in effect promised to work for the client. Pushing one house over another based upon a higher reward is clearly not working for your client.

[Trish Crocker]

I have been an agent for 22 years in the Detroit market, one of the most depressed markets in the country. I want to thank the poster that broke down the commission and I also want you to consider a few other things...In todays economy, the banks are getting very, very tight with mortgage money and the credit worthiness of the buyer is scrutinized closely (if they had done that years ago things might be a little better now..but that's another story). Right now I have my home on the market and I have talked with other agents about a bonus to selling agent. I have gotten mixed opinions. When I am working as a buyers agent, I have a fiduciary duty to my clients to find them the house they want. If I determine the homes I show them based on ME getting more money, I am not being ethical or honest. It may seem like we are making tons of money but let me give you an example just from the past 2 weeks. Showed a client a few homes...wrote an offer for $8000 over asking price..did not get the deal (higher offer)...next,after showing them 10 more, found them a perfect, incredibly cool house...mom and dad came to the home inspection..dad talked them out of buying it..and came up with weird excuses like "the cement floor seems slanted...there must be a reason for this..and the sellers covered it up with tile...I've always said, if they are covering it up there must be a reason:shrug:" sure moron, it's the dining room..did you want a cement floor without covering??? This was a 2600 square foot colonial, 50 years old, terrific condition..dated but spotless, with an inground pool that had been professionally maintained in a beautiful neighborhood..all for $150K. The home inspector gave a great report but dad won....another deal down the drain...next, wrote an offer for another couple...$2500 over asking...got outbid...then, yesterday wrote another offer..$5100 over asking....got outbid by a cash offer. In the meantime, I am showing lease condos to a young couple..commission will be $875..after split with listing agent...then with my company I'm left with $192.50...which I will have to pay taxes on...Do you have any idea how much I have spent on gas showing these properties????? Please don't begrudge your real estate agent the comission. There are unscrupulous people in this business but the majority are just trying to make a living and keep their clients happy and out of court. We don't have health insurance or pensions, we run the risk of being involved in law-suits for situations that we have no control over and many times spend weeks or months working with clients only to have them buy a home for sale by owner without giving us the opportunity to work with them in the transaction. Contrary to all of the negative news reports, the housing marked is booming here..there are not enough listings so the low and mid-priced houses are selling fast. The banks are playing it smart (boy, is that an oxymoron..smart/bank??)..anyway, they are slowly releasing the foreclosed homes so there is more of a demand..this increases prices..a good move. I'm not complaining...I love my job but truthfully, right now the only house I want to sell is mine...so we can get down there! Maybe I should offer a bonus?..maybe I'll get some smarmy, unscrupulous agent to take the bait...hmm I think I'll try it..let you know how it goes.:icon_wink:

[rubicon]

Offering an incentive to a realtor is not different than offering a bribe to a supplier, provider or cop. As a manager I can't tell you the number of times organiztions desiring to provide their services to us attempted to buy me . I literally threw a couple of these folks out of my office.

This practice is illegal and unethical. How you feel about politicians who have been taking get backs, etc. Of course it is commonplace all over America. In countries such as china it is epidemic

[Trish Crocker]

Offering an incentive is legal in this case, as long as it is disclosed to all parties involved..the money MUST go through the brokers, it is illegal for an agent to take ANY money or incentive from anyone other than their broker. It is not considered a kick-back because everyone knows about it and are in complete agreement...including the buyer. As I stated in the other post, I have a hard time justifying it to myself, if I were the buyer I would not be comfortable with an agent that is looking out for him/herself.

[shcisamax]

Disclosure is the operative word.

[OurHappyHome]

I have read what everyone said here and they are all right to a point. My family has been in real estate for 40+ years and my wife is a Broker. I can tell you from my personal experience that the key to selling your home is PRICE. When an agent shows the buyer 4 or 5 homes in the price and area they want they will usually choose the one that is the best bang for the buck. If you get a list of what is for sale in your area and price it at the bottom 10-20% then you will get the most showings and fastest sale. Also you can offer a bonus for closing before a certain date, say 60-90 days from now. That sometimes helps. $1000 is a nice number in this price home. Good luck.

[Jim 9922]

, if I were the buyer I would not be comfortable with an agent that is looking out for him/herself.

Sorry to say, with any agent the number one person is the agent him/herself. Knock the price down a buck and its 2 cents out of the agent's own pocket, get an extra buck out of the buyer and its 2 cents into the pocket, double that if the agent is also the listing agent. On the flip side a real low price makes it a fast sale for quick commission, less time spent pushing the property and less advertising and promotion expenses spent. (effort vs reward)
The priority/loyality in real estate is:
#1 The Agent
#2 The Agency (the "employer")
#3 The Seller (by contract)
#4 The Buyer

Yes, there are nicer agents than others, who help more, extend themselves more, etc, but the basic pecking order still underlies it all.

[Trish Crocker]

Sorry Jim, I have to disagree. When showing homes, my ONLY concern is finding them a house. Of course, in the car I'm adding my comission up...and determining what bills I'm going to pay with it...Today I'm showing homes to a couple that can't go over 60K...so we are looking at three..45,700, 49,000 and 44,000. With your reasoning, I would be pushing the 49,000? I just want to get them a home and yes, I will make a few bucks. As far as the agency, they have absolutely no idea what I am doing until I turn in the deal. I pay them $14,900 a year no matter how much I make so they don't care about the price of the home. Maybe things are different in other areas but I have been in this business full time for a very, very long time, I taught pre-license classes and trained new agents for quite a few years and I never, ever ran across that attitude. By the way...knock it down a buck and it's actually less than 1.5 cents out of my pocket (3% divided by 2 for my broker minus 12% of the remainder to the company for additional fees) The greedy, smarmy agents get a reputation in the business and the true agents don't even want to work with them.

[shcisamax]

AND, agents always should be doing the best for their clients even if it is for selfish benefit. BECAUSE, when it is time for referrals or when those same people sell, you want to be the one they call. If you get the reputation that you are not doing the best for your client, you are dead in the water.