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.

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.

Spoke to my Realtor
 

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.

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.

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:

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

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.

Disclosure is the operative word.

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.

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.

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.

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.