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The $$$$$$ Bonus to Co-broker--Dilemma

By John March

Services for Real Estate Pros with Charisma Media Group, LLC 50622

December 21, 2007 04:49 AM

The email blast I received from a Realtor reads in part:

$9,000 Buyer Incentive Towards Closing Costs and Community Fees!!

$5,000 Bonus to Co-broker!!

Here's a dilemma--yes it would be nice to get an extra $5000 at closing. And as an agent, I suppose I could swing folks by to see this home, if it meets their criteria.

The overarching question is do these bonus incentives really benefit the Seller or the Buyer?

Does a bonus like this really sway you?

If a home fits the criteria of a buyer and it's in an area she has chosen to explore, you'd show the home, whether there's a bonus or not, wouldn't you?

Do you tell buyer's upfront there is a bonus of $5000 bonus if they buy? (it will be disclosed on the closing statement, for sure).

How do you feel about using that bonus in other ways?

For example: If I were the listing agent, I would simply tell the seller to add the $5000 toward the incentives; or reduce his asking price by $5000; or hold that $5000 in reserve for negotiating purposes.

If I were the buyer's agent, I'd tell my clients that there is a bonus offered to the agent who brings the buyer and offer to deduct it or rebate it. (without violating any laws)

What's your take on this?

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Brett Noel

Keller Williams - Paso Robles, CA

Smart Agent, Appealing to the one thing that effects not onlt real estate agents but humanity. That is Greed. As much as we would like to stand on the higher ground and say we wouldnt show the property on the chance that the client might like it, we would be fooling ourselves.

For the benefit of the doubt, I know you wouldnt play that game, but the reason greed is still around and still used is because it works. Even with Real Estate agents who are probably one of the most honorable professions to be in.

Dec 21, 2007 05:02 AM

Melina Tomson

Tomson Burnham, llc Licensed in the State of Oregon - Salem, OR

Principal Broker/Owner, M.S.

I always tell my buyer there is a bonus. It's a sign of negotiability/desperation to me. We can't rebate here, so I can't give it to my clients.

I have waived bonuses before as the commission offered was good, and the seller was upside down with the offer made and accepted by them. If the seller has to bring $10,000 to the table no point in asking them for the bonus in addition to the acceptable commission offered.

There is business and then there is common decency. Agents need to decide for themselves where the boundary is.

Dec 21, 2007 05:03 AM

Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

I guess bonuses are OK but as the listing agent I would rather the seller reduce the price. As a buyer's agent, the bonus would be nice. Although I have never been in the situation I would disclose the bonus to the buyer's. If they like the house, fine.

Dec 21, 2007 05:06 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

I don't think that the bonus to the agent does a damn thing.....if it does, then the people need to get a different agent. If the house was the right one for them, then a bonus shouldn't matter.

Bob Mitchell

ValueList Real Estate Services, Inc.

Dec 21, 2007 05:11 AM

Gail Robinson

William Raveis Real Estate - Southport, CT

CRS, GRI, e-PRO Fairfield County, CT

John - I always disclose the bonus to my client. In fact I rush to do that, as I don't want to have anything destroy the trust level between myself and my client. I never see the bonus money as money in my pocket, but as money to negotiate the deal with. This further builds credibility with my clients. I have to say I haven't been involved in a transaction that involved a bonus to the selling agent yet, but I have been involved in transactions like this. I personally think the listing agent would do better to provide the same money back to the buyer through a credit at closing for closing costs or redecorating costs.

Dec 21, 2007 05:52 AM

Cindy Jones

Integrity Real Estate Group - Woodbridge, VA

Pentagon, Fort Belvoir & Quantico Real Estate News

If the co-broke is 3% then the bonuses go to my buyers. No questions asked. It is just the way I do business.

Dec 21, 2007 06:07 AM

John March

Charisma Media Group, LLC - Bluffton, SC

"Engage, connect, prosper" (Matt 6:33)

I think I am more on the the same wave length as Gail, Melina and Cindy. thank you all for taking the time to comment.

john

Dec 21, 2007 07:31 AM

Josette Skilling

Keller Williams Capital Properties - Bethesda, MD

If the house is priced well you don't need a bonus. So if there is a bonus the house is not priced well. Moral of the story: price the house well! That will bring in the buyers and if you need more use incentives to them.

Trying to incent an agent via payment brings up too many unethical images for my taste. As long as we are paid a fee to do the work, anything above should go towards getting the buyer in the door, not the agent.

Dec 21, 2007 07:36 AM

The $$$$$$ Bonus to Co-broker--Dilemma

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