Mona's Real Estate Matters and a Myriad of Other Conversations

Do Selling Bonuses Work for Real Estate Agents?

Sellers often wonder if offering a "Selling Bonus" will work to get agents to sell their houses quicker.  Sellers can get antsy about attention level their house is getting by local real estate agents.  Locally, we still have a certain price point that there is more inventory than buyers.  This is pointed out to sellers when they list their property, but they are still hopeful that there is a way to tempt an agent into putting their property at the head of the list.  Usually the seller thinks that an additional financial incentive on top of the professional fee or commission we will earn when the transaction closes will seal the deal for them.

It would be hard for any agent to understand how real estate works in all 50 states but here in North Carolina, agents must disclose to their clients (buyers AND sellers), if there is an opportunity for the agent to earn a penny more than the expected commission paid at the close of the transaction.  Not only do we have to disclose this information, we have to have permission to accept it.  We have to disclose if we receive a referral fee from home warranty companies or other service providers and we for darned certain have to disclose if a seller is offering an additional (often sizeable) bonus amount for bringing a buyer.

When this information is disclosed to buyers they initially have a concern that the main reason their agent is showing this particular piece of property is just because of the bonus.  I've seen bonuses range anywhere from $500 to $10,000!  The second reaction is usually a bit of resentment, wondering why if the seller was willing to pay the agent extra then why wouldn't the seller just reduce the price of the property?

Fair observations, I think.

I don't know any agents who would search for properties for the buyers and consciously look for properties that the seller has offered a bonus for selling, maybe those folks do exist.  At least I hope I don't know any.  There are times that extra and unexpected income would be so welcome but for me personally, as an agent working with buyers preparing to spend a massive amount of money on their real estate purchase...something doesn't feel right about accepting a bonus that might have meant a reduction in the buyers' purchase price, just for doing my job.

For those occasions that I did show a house to the buyer that came with a bonus, I told them that if they liked the house the bonus would be requested to come off the purchase price.  Interestingly enough, no buyer has ever selected the house with the bonus offered!

What does it say about how sellers regard agents if they think that bribery...I mean bonuses would make a difference when we select houses to show our clients?  Don't they think that we already are motivated to match the right house with the right client?

This is my opinion only but no, I don't think offering a selling bonus will make any difference in the time it takes to sell a house.  What makes the difference is location, pricing the house right, keeping the house in showing condition, pricing the house right, making the house available for convenient showings, pricing the house right and oh yeah, pricing the house right.

To be fair, I don't think all sellers believe agents to be creatures of avarice and they may honestly think that offering the bonus is more of a reward or thank you thing but in North Carolina anyway, we have to disclose it.  My personal opinion wouldn't change even if we were allowed to sneak around and accept it.  Our job is to make sure our buyer gets the best deal possible on the property they want and I can't help but think that the "bonus" amount wouldn't be better used toward's the buyer's bottom line.

 

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Comment balloon 9 commentsMona Gersky • August 25 2015 06:03AM
Do Selling Bonuses Work for Real Estate Agents?
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