A couple of weeks ago, my dad moved to Tulsa. This was during the time when Active Rain was moving their data to new servers. Because the Proxy Errors were so bad at the time, I didn't blog about his move. I will soon.
Yesterday, I went to check up on my dad and to see how he is doing getting moved into the new house. On his breakfast table was the local "Woodland Glen Times." This is the farming piece that two Coldwell Banker agents publish and distribute in the neighborhood each month. The lead article headline is, "Buyer Bonus Program". "Hmmm. Interesting, I thought." So I picked up the paper and started reading.
Here's What it Say's...
"The Coldwell Banker Buyer Bonus Event is a three month long national sales promotion that begins on May 1st and lasts through July 31st, 2010. Sellers participating in the promotion are offering to contribute 3% of the accepted offer price up to $8000 credit at closing back to homebuyers who consummate a contract before the July 31st deadline."
It seems that Coldwell Banker has decided to extend the Homebuyer Tax Credit through their Buyer Bonus Event. Okay, that's intriguing. There is no doubt that the tax credit helped motivate buyers to buy houses. But this brings up some questions for me...
1) If I'm a seller and you want me to give $8K back to a buyer at closing, where does that $8K come from? Are you going to pay it for me as a Real Estate agent? No? You want me to pay it? Then that means the price is going up $8K!
2) And if the price goes up to compensate for the $8K, we have to be concerned about the home appraising. Appraisers are under a lot of scrutiny by the government right now from what I hear. Appraisals are coming in tight and often low. What happens if the appraisal comes in below the $8K raised price? Does the $8k to the buyer go away or does the seller get stuck with the loss. Either way, somebody ain't gonna be happy!
3) What script does one use to convince a seller to give away $8K of profit to a buyer? Especially if the price is NOT raised? If I'm a seller and you're trying to talk me into that, you'd have a hard time!
4) Buyer incentives are illegal in Oklahoma...at least for real estate agents. I think CB might be on thin ice on this one since they are the ones suggesting the idea to sellers. I don't know for sure about this since I don't have much experience with this kind of thing. Any CB agents (or Lenn Harley LOL) are welcome to comment.
Don't get me wrong. I think this is a novel idea. I applaud CB for thinking out of the box. I'm just curious to see how this might play out. And I'd also kind of like to know if any CB agents are having any success with it!