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No, Putting the Text of the Bonus in Bold Doesn't Work!

Because the price is still too high!

Bethesda Real Estate I had a seller ask me recently to include a $5000 selling agent bonus on a very small home in Silver Spring. After a week or so of no showings she asked me to put the text in bold so that agents could really see it. Causing me to look like this:

Bethesda Real Estate

Unfortunately, this is only one of the fallacies she believed rather than my advice, mostly because she looked like this...

Fallacy #1: Everything else in the county is more expensive so those who want the least expensive home will flock to her home.

Fact: Can't say as I've ever even once had a buyer say to me, "take me right to the cheapest house in Montgomery County. That's exactly where I want to live!" Most pick an area and then find the house that suits their price range. If they don't want to live in your area, cheapest house won't matter!

Fallacy #2: Every home will attract a buyer so if we just stay at this price a buyer will come to us eventually.

Fact: Not every home will sell in this market. Many will fail and do as evidenced by the high number of expired and withdrawn listings.

Fallacy #3: Put the bonus in bold so agents can see that they'll get paid more for selling this house.

Fact: An agent needs a buyer interested in the property first. When it's priced so high no one shows the property ever, the bonus ain't gonna cut it. Agents aren't stupid.

Fallacy #4: We don't just want some investor to buy our house for nothing.

Fact: When your home is in an area of more than 50% foreclosures everyone's an investor. You are chasing the market down week by week by week. Those that are selling are getting waaaaaay under the active listings to sell.
Fact: When an area is hit like this it will be years and years before the market comes back enough to make the money you wanted
Fact: Your strategy allowed you to succeed in not giving your house away for nothing. Unfortunately, you got nothing as a result. Worth it?

She's a dear. I like her... she likes me. But I declined to continue working with her because those two faces above can't really live in harmony....

For more information about real estate sales in Bethesda, MD 20816 please email me at josette.skilling@longandfoster.com or visit my website at Bethesda Real Estate

All data courtesy of:

Long & Foster Real Estate, Inc.
4733 Bethesda Avenue
Bethesda, MD 20814
301-385-9213 (cell)
240-497-1700 (office)

Disclaimer: The opinions expressed by The Activerain Network and its members and those providing comments are theirs alone, and do not reflect the opinions of Josette Skilling or Long & Foster Real Estate, Inc. Josette Skilling and Long & Foster Real Estate, Inc. are not responsible for the accuracy nor the content provided by the community.

Posted by Bethesda Real Estate Sales ~ Josette Skilling on 12/05/2007 05:48 PM

Comments (67)

bethesda real estate, josette skilling, realtor bethesda, neighborhoods bethesda, montgomery county maryland real estate, market reports

67 Comments on No, Putting the Text of the Bonus in Bold Doesn't Work!

DEC

2007

I am a little new in the biz. But one thing I believe is that I'd rather see sellers offer BUYER incentives instead. What I have found, at least with some of my buyer clients so far, is they will find out about the bonus and expect that it will be shared or benefit THEM some way. A $5000 buyers incentive would do a lot more for the listing in my opinion! Lower the price, offer allowances for new appliances, remodling, warranty ANYTHING to benefit the buyer. After all, right now it's all about the buyer isn't it?

Mark, I should have a little face of me saying that over and over! Just keep lowering the price!!!!

A bolded selling agent bonus looks like an act of desperation to me. It's a red flag that says the property doesn't have much else to offer.

Rosario, I think a bonus in general says that...

It is very liberating to walk away from a listing that you know won't sell with the unreasonable expectations that your seller want.

Congratulations! Now go get one that understands the market and wants to sell their property.

Bob, Yes sir! I'm marching on....

A boonus is not enough for a realtor to show a house if it does not meet a clients needs. It does get attention but the price remains the big issue unless the home would need something chaper to make it look better. Price is not always everything.

I think you need several elements to move a property in this market -- 1) property priced well for the conditition of the property 2) Make repairs and get rid of clutter -- clean 3) fair co-broke fee -- if you are taking a discount, it doesn't mean the other agent should work for less 4) all incentives should be for the buyer not the person assisting or representing the buyer -- This formula has worked very well for my past clients.

Josette - Good for you - if more of us could learn to say "no" we might earn some respect (as a profession). I use to live in your county, sorry to hear it is running about parallel with our incredible market here in Michigan.

Those agent incentives I think are silly. Buyer's agents can't make their clients buy the house with incentives, so the incentive is directed to the wrong party. If there is to be any incentive it should be promoted to the buyer who is the one who decides to make an offer or not.

Eric, exactly my sentiments.

Joan, exactly correct. In this case they had everything except price so if they had put the money into the correct bucket the house might have sold.

John, I learned a great deal on this. How to respectfully let a client go, how to work a market that is in distress and how not to sugarcoat a darn word I say. My county as a whole is actually quite healthy but this area of Silver Spring is hit very hard by distressed properties. I did a post a while back on it and showed how the pockets looked and lo and behold right where my listing is!

Deborah, I think they are the silliest. But she was the client and truly thought it would work (she was getting side line advice). I tried to tell her they get negotiated away immediately....

I have tried the agent bonus thing and in the end it is not worth it. Better to lower the price or offer to the buyer. I think it is more likely to create problems with the kind of offers we are seeing come in. Good for you for firing her...Do you have an agent you refer to in Virginia? I may be able to give you some MD business when it comes my way

Sally, I think it creates motive problems for all of us. It's bad enough that we are considered sleazy most of the time anyway. Sheesh.

I added you as an associate. Let me know which areas you cover. I like to stay in my corner of Montgomery County!

Jossette

Bonus not always work- neither BOLD remarks

Maria, sadly nothing in bold remarks really works except Google for search terms!

Your seller would be better off reducing her house by the $5,000 vs. offering a agent bonue Josette. Like others have said, it's about the price and if an agent doesn't have a buyer at that price, the bonus isn't going to make a difference. I also think you did the right thing here...the listing would have most likely caused you more pain and time in the long run. Better luck next time!!

Josette, that's why you're the agent and she isn't! Good thing you get along with her, hopefully she will understand your point, and eventually probably will. If not just write "you're crazy"...in bold, of course.

LOL... I could use the extra $5000, what's the MLS# again?

Sue, wonder how many times I said that! We live and learn. I don't need to be banged over the head *much* to get it!

Chris, of course because in bold we'll all get it more. That was truly funny!

Maria, if you could find a buyer who just loves this one house...

Hey, Josette! Congratulations on your well-deserved gold star! And bonuses just don't work - especially if the price is too high or it is funky and smells like cats! Not that your listing is funky or smells like cats!

Patricia, you are the queen of gold stars lately! Well, this listing didn't smell like cats :) I'd love to just send this link, and say "see, we all agree."

Michael, thanks for stopping by! No one else truly got just how dry that line really was meant to be. And the beauty of it is I ddin't make up a word! Wanna blog.... just have conversations with the public every day.

DEC

2007

Best way to sell a house? "Price it right/Buyer incentives"! Think I will make bumper stickers for all my agents to relay the message!

P.S. If we all got rid of our overpriced listings.....we'd have less inventory and help to turn this market around a bit sooner!!!

I love the faces. To say 'bold it so agents can really see it', doesn't that imply we can't see all the other info on the MLS that's not bolded, like the price and the address and the characteristics of the house!!! Yeah, they're not getting any showings because we're all blind and can only see bolded letters! It couldn't possibly be the price or the condition of the house. Nah........ OMG.

Chasing the market down -- a well-turned phrase. You nailed it, Josette. While you're putting the agent bonus in bold could you change the exterior photo of my house in the MLS?

Joni, I'd buy one! Consider my part of the pollution clearing done! No more overpriced listings for me.

Jackie, of course not.... it's not in bold. hmmm.... I have this other listing....

Andrew, oh, you have a picture of the house in the MLS? That snow covered house will fit right in just about now. Sort of like fashion being back in vogue.

JOSETTE: Congrats on your feature. Such a simple concept, yet so hard for us to make people believe. You can put the bonus at $20,000 and it won't make a difference if there are no buyers that are willing to pay that price. Good luck with this one.

Adam, thanks! It is simple, isn't it? Price your home well and it will sell. The problem is those eyeballs above get in their way...

I just love how we are the "professionals" who do this everyday, and yet our clients always think they know better. I have fired two clients recently for the same reason. One went FSBO, good luck with that!

Chelle, it's so hard when they are getting advice from everywhere else in their lives. Add that to those eyeballs up top and.... fired clients.

Chelle: I love that you 'fired' your clients. That's awesome. As professionals, why should we knowingly deal with clients who's not going to 'sell' their home and waste our time. Good for you!

Jackie, my goal is to not have to fire a client again. I didn't ask the right questions up front on whether or not they'd reduce when the price wasn't right. Never again!

Good post. I'm not a fan of agent bonuses and as you stated, the bold type isn't gonna make a darn bit of difference if the price is too high.

Craig, they sure don't work for me!

Sellers offering bennies to buyers makes the most sense it seems.

DEC

2007

Bob & Carolyn, thanks for stopping by....

Agent bonuses are sticky. If an agent has a buyer-broker agreement with a buyer that says his or her compensation will be 3% of the sales price, isn't anything over and above that up to the buyer to decide?

Tina, good question and I'm not sure of the answer. But once buyers know about them, they just usually get negotiated away...

So True- In this market dancing bears won't sell your home if it's priced to high.

Steve, dancing bears? I could use dancing bears? Maybe I'll put that in bold :)

I really chuckled with this. Loved the faces..more than the bold!

Melanie, it's funny because I had no intention of using those faces when I started, but it just struck me that the ridiculousness of it really went with those two silly faces...

Good post. There was an interesting post recently on the ethical implications of offering agent bonuses. I agree that buyer incentives are a better way to go. I don't know about the bolding thing. I think an agent is going to see the word "Bonus" whereever it is buried in the listing. If not, he is not looking close enough at prospective homes for his buyers

My blog: Pensacola Real Estate News

Karl, thanks for stopping by!

Hi Josette,
Agent bonus says, we're desperate make a low ball offer and that's what happens most of the time.

Cynthia, causing my face to look like the above!!

exactly right. The sellers need to set the price where reality is taken into consideration.

James, reality is still a bit difficult for some sellers.

DEC

2007

Congratulations on being able to walk away from the client. I had a similar thing happen. One of my listings needed new flooring and the sellers wanted to offer a 10K decorating bonus. In my area, these don't tend to work because people just want to move right in without any work being done. So we offered a 10K bonus, then they wanted me to take away the bonus and drop the price 20K, still nothing. Meanwhile, new flooring cost 5K. After no action at the price reduction, I finally convinced them to install new flooring. Once the flooring was in it sold in a week. Painful for them to learn but sometimes that's the way sellers have to do it. It was a new market for them too, they had only witnessed a sellers market so it was tough.

Krista, these are all painful lessons for people to understand. I don't think decorating allowances work anywhere! Folks just can't get past seeing ratty old flooring instead of the new and they always overestimate how much time and money it will take to get it done. I'm telling sellers the same thing, just get the work done so you have the chance at a sale.

DEC

2007

Josette,

This is a great post! The faces are so funny! Sometimes it's best to move on as taking those listings can become a waste of time.

Dave, I think listings that won't ever move are too prevalent in this market. If we could get rid of them stats would change significantly.

Josette - Educating clients can be exhausting, but it is our job. The market is certainly one where we can afford to turn down a listing if they're being unreasonable.

Tom, I agree and thinks it's really our responsibility to do so. I didn't realize at first just how overpriced this home would be but the bigger problem was not adjusting at all to the market around them...

DEC

2007

Great post- you're right on... Lower the Price!

Judy, thanks! And we should make sure we BOLD that for sure!

DEC

2007

Josette, how did I miss this wonderful post? Belated congrats on the feature....I never agree to offer a selling bonus. If a seller is willing to part with that money, they should reduce the price, not try to dangle a carrot that most agents won't bite on anyway.

Lisa, so true! I don't like the appearance of greed in any fashion. Buyer incentives are much better for everyone!

DEC

2007

Hi Josette,

Your post is so true. It all boils down to price and condition of the home. I would much rather see an incentive for my buyers.

Catherine

Catherine, I'm all for the incentives. Anything else is, for me, a huge disincentive. Get the price right!

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