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Incentives? Good or fluff

By Ken Nimmo

Real Estate Agent with National Real Estate of Prescott

August 01, 2007 01:18 AM

With the market being slow through out the country we are seeing more and more incentives. I have. So what are the best or worst incentives out there?

Best

Seller to buyer contributions IE: Seller offering cash for buyers closing cost, appraisal, home inspection ,home warranty.

Broker offering cash at closing to buyer.

Worst

Seller offering bonus to selling agent/broker.

middle ground

Cash incentive to get a contract accepted by a cut off date

What do you think? What are you seeing out there and is it working or hurting your market?

As a buyer would an incentive sway you from one home to another?

As a Realtor would you push to write a contract or show a property that has an added incentive to you and your company?

Is there a line there for Realtors?

Comments(13)

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Al Maxwell

Keller Williams - Marietta, GA

Real Estate Agent

Ken, I posted a similar question last week. You'll get lots of responses from the Home Stagers, who sugegst that you spend it on staging. I have found that paying for all/some of the closing costs opens up a whole new group of buyers...unles you're in the very high end prices.

Aug 01, 2007 01:29 AM

Ken Nimmo

National Real Estate of Prescott - Prescott, AZ

Al,

I to think buyer incentives go further than anything but a price reduction.

Aug 01, 2007 01:31 AM

Judi Glamb

Coldwell Banker Hearthside - Hellertown, PA

Associate Broker, ABR

Best Incentives: 1) Price the house right. 2) Present a clean & maintained home 3) Home Warranty.

The home the buyer selects should be their decision not influenced by an agent's incentive. To keep agents happy don't skimp on the co-op side.

I personally don't like the cash/credit back option to the buyer from Agent. My team leader advertises this (not working to my knowledge). It's too complicated.

Aug 01, 2007 01:40 AM

Rebecca Savitski

BSR Real Estate Group - Cary, NC

NC Real Estate Listings

Buyers know its a buyers market they watch the evening news if it is a home they want to buy they will make an offer. All of my recent offers have included some sort of concessions.

Aug 01, 2007 01:44 AM

Ginger Wilcox

Sindeo - San Francisco, CA

Have the seller agree to pay points to get the buyer's interest rate down. The effect can be significant for a buyer who will have a lot more purchasing power. Far more than a price reduction of the same amount.

Aug 01, 2007 01:47 AM

Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

In this market, price it right. When buyers come their agents are smart enough to know to ask for a warranty, seller closing cost assistance, etc. If you price right, they will come!

Aug 01, 2007 01:50 AM

Pricing the property right is definitely the best strategy out there. But we all know that sellers want to try other things.

I like Gingers idea of offering to buy the buyers loan down. I wuld put a limit on it though depending on the price point. I will try this one for sure.

Aug 01, 2007 02:03 AM

Tom Jeffers

Affordable Realty of Ohio LLC - Parma Heights, OH

Affordable Realty of Ohio LLC

I wrote something about this the other day. I definitely agree that pricing it right is #1, and seller contributions will open up more buyers. Sometimes when it's slow people just need a little enticement.

Aug 01, 2007 02:12 AM

Donna Harris

Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX

Realtor,Mediator,Ombudsman,Property Tax Arbitrator

To me, offering incentives doesn't mean much at all since everything is negotiable. One seller might offer to pay closing costs, but it doesn't mean that if you ask for closing costs from the next seller you're not going to get it. In my market, it's almost a normal thing for the buyer to ask for closing costs, so there is no need to advertise it. When you do, you're basically saying, I'm not really asking $150k for my house. I'm asking $145k because I already volunteered $5k for your closing costs. Offering a buyers' agent bonus seems to be the key in my market. I tend to do 3.5-4% for the buyers' agents in order to put my listings above the rest.

Aug 01, 2007 02:20 AM

Donna good discussion topic.

In my experience when the buyer finds out that you are making an extra $2,000 bonus for selling the property a couple of things can happen.

They don't care because they just want the home.

They ask you to put the bonus towards there fees.

They question your loyalty to them if you push a bonus home over a normal commission home.

I feel that we are to have our buyers best interest in the transaction if we represent the buyer. Can the bonus sway a Realtor one way or the other?

Aug 01, 2007 02:56 AM

Ken, Me, personally, a bonus doesn't sway anything. A buyer is going to buy a house that they want. However, if there are 100 properties available that match the specifics of what that buyer is looking for, and the list needs to be narrowed down to 10 to show, with all other things being equal, I think many agents look at what is offered to narrow down a list with too many possibilities.

Aug 01, 2007 07:57 AM

Kathy McGraw

CELLing Realty - White Water, CA

Riverside County CA Real Estate

I had a seller offer $10,000 to save a deal (Quiet Title) but unfortunetly the Buyers Agent thought that money was for him and the Lender to split.......I had to tell him, NO it is for your clients.........

Aug 04, 2007 04:38 AM

Katy that doesn't sound like the agent was thinking of his fiduciary does it.

Aug 05, 2007 04:27 AM

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