Should I offer a bonus to sell my home?

By
Real Estate Agent with Real Estate One 6501304423
https://activerain.com/droplet/52hY

Does it work?  Should I offer a bonus to sell my home?  Everybody wants to sell their home for top dollar and to sell their home quickly.  So would a small bonus to a real estate agent entice them to sell your home for you quicker.  Or would offering a bonus to the home buyer work better.  Let's talk about these questions in depth.

First of all a buyers agent owes his loyalty to their buyer.  They are supposed to be working in the best interest of the buyer.  So offering a bonus to a buyers agent really doesn't sway them to buy your home.  They will take the bonus if their buyer buys the home, but the agent is going to show your home any way about it if the house is what their buyer wants.  So when home sellers ask me "Will offering a bonus to real estate agents sell my home faster?  My answer to them is "No".

The first problem is basically is that it would have to be a substantial bonus to the real estate agent to sway them.  So no a $500 or $1000 bonus is not going to do anything to sell your home to an ethical buyers agent.  It doesn't matter whether it is in Metro Detroit home for sale in a subdivision or a lakefront home for sale in Oakland County MI.  When I say substantial, it would have to be about double what the commission is now." 

As a buyer's agent I am working for the buyer in their best interests.  Not to line my pockets.   There is the problem.  It's not about my choice.  It's about what the buyer likes and wants.  Their needs and wants are totally different than mine.  What one buyer likes the next buyer may hate.  Everybody is different.  Real estate sales shouldn't be about selling.   It's about the buyer choosing the right home, not pressuring them to buy because somebody is offering me a thousand dollars more to have my client buy their house instead of the one down the street.  Which is the home that the buyer wants, and likes?

In my opinion you want to offer the bonus to the home buyer.  Offer them something substantial.  You also have to be careful of the banking rules and government's laws.  Any bonus will have to show up on the final statement.  Only if it is a cash deal will it not matter.  Sometimes you can offer a credit.  A credit towards new carpet, new cabinets, or closing costs.

Remember when you offer a bonus it doesn't stop the buyer from asking for more.  Offering a bonus is a tricky business.  It has to be done right to pass  the scrutiny of the bank's underwriters and the laws of our government. 

Bottom line is:  No you shouldn't offer a bonus to the real estate agent.  You should offer the bonus to the home buyer.  It will be more effective that way.

If you have more questions about selling your home in Metro Detroit or selling your lakefront home in Southeastern Michigan give me a call at 248-310-6239.  I helped many home buyers get their home sold for top dollar and quickly.   

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Ambassador
1,651,731
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I think bonuses are a waste and normally they are offere as somewhat of a bride to the selling agent.

Mar 16, 2017 03:54 PM #27
Rainmaker
2,477,602
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

If a product is readied for market and priced right...it moves bonus or no bonus

Mar 16, 2017 04:02 PM #28
Rainer
352,676
Teri Pacitto
Compass - Westlake Village, CA
Real Estate, Your Style...Your Home...My Specialty

No bonus.  Just price it right, disclose and play nice.  A bonus sends the wrong message and is often a bait and switch.  I am not a fan of conditional sales tactics and they rarely work.  

Mar 16, 2017 04:55 PM #29
Rainmaker
728,962
Andrea Bedard
Thompson Company, REALTORS® - Silver Spring, MD
M.A.; REALTOR® Silver Spring, MD and beyond

Thank you Russ for a timely post and the inspiration it provided! My answer is "no, don't offer a bonus" but improve your house instead. 

Mar 16, 2017 06:10 PM #30
Rainmaker
351,067
Anne Edwards Johnson
JP and Associates - Austin, TX
Austin Realtor | HookemhomesATX (512)917-5260

Agree!  Apply the bonus to getting the home in stellar shape or seller contribution to closing costs - pending the regulations of course. 

Mar 16, 2017 06:40 PM #31
Rainer
126,363
Stavrula "Sam" Crafa, RNC,GRI, CDPE, PSA
Future Home Realty - Seminole, FL
Providing the integrity and service you deserve.

Agents are happy to just get a fair commission. A bonus never influenced me in any way. Can't make the buyer buy the house if it's not the right house for the buyer. Offer to pay some closing costs for the buyer. If they are trying to deside between two houses, it could sway the buyer a sellers way. 

Mar 16, 2017 06:53 PM #32
Rainer
504,244
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Russ,

The bonus is not a motivating factor for me & I have never collected one. Usually homes that offer one have other problems. I just try to find the best house for my clients' budget at that moment in time. 

Mar 16, 2017 07:22 PM #33
Rainer
482,689
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Interesting post and comments.

Mar 16, 2017 11:35 PM #34
Rainmaker
343,845
Dana Basiliere
Rossi & Riina Real Estate - Williston, VT
Making deals "Happen"

Offering a selling bonus to an agency is a red flag in my humble opinion. It is also a waste of money. As other people (and the author) have mentioned buyer's agents are working for the buyer. In fact it should make all involved look at the property with extra scrutiny.

Mar 17, 2017 06:06 AM #35
Rainmaker
1,954,111
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Should need the folded up dead president slid into a palm for better service, to get the best table spot by the window overlooking the water at the real estate closing. No matter what size sale price, give 125% and be the little red hen for the commission charged, earned.

Mar 17, 2017 06:07 AM #36
Rainmaker
528,416
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I agree with everything you wrote.  Bonuses do not sway me when looking a home that may fit the buyer. Better to spend that money on fixing up and cleaning the house before it hits the market.

Mar 17, 2017 07:54 AM #37
Rainmaker
1,022,446
Gloria Todor
Century 21 Absolute Realty - Springfield, PA
& Doug Durren (484) 431-3686 in SE PA

Good subject Russ. Ethically bonuses offered to agents feels wrong to me. This tactic might be one of the lingering reasons real estate agents still have a bad reputation because a bonus seems to suggest that some agents might ignore some listings if no bonus is offered.

Mar 17, 2017 08:40 AM #38
Rainer
140,053
Phil Rymes
Birkshire Hathaway HomeServices Lifestyle Properties - Asheville, NC
. . . serving Asheville and all of western NC

A Seller offering a Buyer Agent a bonus above initially advertised commission is always going to be perceived by Buyer as a conflict of interest.  My goal, in a Buyer Agent role, is to fulfill my obligations to my Buyer in an absolute manner.  

If I show a home that has a bonus commission offer, I immediately make my client aware of this offering and then have to offer assurances that this is not the reason for inclusion in the pool of possible properties, if this property was my suggestion.  It always puts me in a compromised position, though,  particularly if I truly believe this property is the best of the current market offerings for this particular client.  Beyond having the best interests of Buyer as my goal, I want Buyer to always feel I have that as my goal.  Aren't we trying to cultivate long term relationships that will generate us repeat business as well as referrals?

When I represent Seller and Seller asks to offer such a bonus, I always explain that the bonus to Buyer will have more impact and not introduce the perception of conflict of interest, and is always the route I prefer.  Of course, they are Seller, and ultimately I must take their direction.

Mar 17, 2017 09:08 AM #39
Rainmaker
2,812,352
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

I agree.  Offer the bonus to the buyer ... not the agent. The buyer is the one that needs to benfit ... not the agent. 

Mar 17, 2017 11:43 AM #40
Rainmaker
2,123,169
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Price it right. Prepare and present it for market (preferably professionally) and market with high quality photos. 

I'm not an agent, but in my professional staging opinion offering a credit for replacement or improvements is a bad idea. Once buyers see the bad flooring or the old appliances they get the impression that the home has not been properly maintained....perceived value drops in their mind. Don't offer them money to fix things, offer them a move-in ready, well maintained home!

Mar 17, 2017 12:35 PM #41
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

In our market the "bonus" typically comes off the listing agents' commission, the seller is not paying the buyers' agent.  Since most bonuses to the BA aren't "disclosed" it could come off as a conflict if the buyers ever found out.  The "bonus" should be paid by the listing agent to the BA, IMHO, to avoid that.

Mar 17, 2017 01:44 PM #42
Rainmaker
545,167
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

I have tested it...

When I sell my own home, I always put a bonus or hefty commission to the BA on it.  It gets more showings and sells higher than the rest in the neighborhood.

Lets face it, a lot of agents are ruled by greed.

Eve

Mar 17, 2017 02:52 PM #43
Rainmaker
403,583
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

I wouldn't. So long as a property s marketed with a fair commission rate I will show it. 

Mar 18, 2017 09:01 AM #44
Rainmaker
981,963
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Couldn't agree more.  A bonus to an agent is pointless.  A credit or price reduction speaks volumes for a buyer!

Mar 20, 2017 08:50 PM #45
Rainmaker
776,437
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

I have never been comfortable with bonuses - as a buyers agent I am not in the business to push one home over another, I'm in the business to represent my client, and pushing a home because of a bonus for me is not the best interest of the client. -Kasey

Apr 04, 2017 04:48 PM #46
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