Buyers' Agents: Does higher commission or agent bonus affect your approach?

Mike - That ad send the message to me that someone is desperate and I wouldn't be surprised if they declared Bankruptcy in a few months.  No way I would buy a home in a subdivision that could halt construction of the area (like sidewalks, park, other homes etc..)  That is a big red flag to me and the written agency agreement does lead to transparency.  Too bad so many clients don't understand or value these protective measures provided to them.

I can honestly say that I do not even look at commission.  I just took my client to a builder offering 2% (ouch!).  If this is the house the client wants then we proceed with the offer, period!

I don't mind the extra money.  But when I see higher commissions, I usually see extra headaches.

I mean why offer extra money unless the home had some issues preventing a timely sale?

(Although I have seen the rare seller with a well priced home who just wanted to get a sale at warp speed.  But this is more the exception rather than the rule.)

Not surprisingly I look at this pretty much the same way you do. "Extras" to me are simply "bonuses" to pass on to my client.  Not too long ago sellers were offering stuff like flat panel tvs to the agent who would sell the home. Now what in the world would I say to a client to justify putting it in MY home and not theirs?

I remember going to the CE class where the new disclosure rule was discussed and quietly noting the reactions from others. It was eye opening...

I also rarely look at the commission as my buyers pick out homes that THEY want to see.  With the new disclosure I do explain it to them, but most rarely even care.  They know that I'll never steer them  to a house just because of the extra commission.

Think about this - If we are doing our jobs properly to begin with our Buyers are being presented with ALL the homes that meet their requirements.  Then it is up to them to start to cull down the list and end up with a short-list of properties that they are specifically attracted to.  If someone comes out of left field with a "larger-than-life" commission offering for a property that wasn't even on the clients radar screen to begin with, and then we try to get them interested simply because of the commission opportunity, aren't we by default implying that we were not doing a good job in identifiying properties on behalf of that client in the first place?  I find that these incentives do little to help move product.  I think it makes a marketing person somewhere feel better that they are being "proactive" but my guess is if they truly measured results they would find that these programs do little to stimulate sales.

Vito Boscaino

North High Realty, LLC

Dublin, Ohio

http://www.ServingColumbus.com

You usually see these offers because of a soft market. It does not necessarily mean that there is anything wrong with the home. If you are going to show one of those homes to your clients, then you had best show them a bunch of similarly situated homes that do not have incentives attached to avoid the appearance that you do not have your client's best needs at heart. Also, transparency is the best approach whether it is the rule in your jurisdiction or not.

I do not consider commissions when selecting properties for my buyers.  They need what they need in a home, and whatever commission is being offered is sufficient for me.

I don't find that inducements motivate me. I always think of what my buyer has told me they need and if a property happens to have an inducement, then that's fine. However, I do not show homes that are not relevant simply because I can make extra cash if I happen to sell it. I don't think I'm doing my job if I do that.

Offering incentives to buyers (hawaiian vacation, 6 mos. no payments, etc.) or buyers agents (bonus, increased commission, trips, etc.) has never worked for my sellers who have been convinced that is all it would take to move their home.  And I have never taken a buyer to a property because of an offered incentive unless it was already on their list.  There are much better ways of getting a home sold, starting with pricing it correctly and good staging.

Great rule in NC, buyers need to know that an agent is working for them, not a bigger paycheck!

Here in Ontario we have disclosures that show what the representative for the purchaser's commission or fee is.

Ty