In a down market, I am always looking for a way to differentiate my listings. I have added several agent and buyer bonuses as an incentive to get showings and hopefully generate an offer. On the buyer side, do the bonuses make a difference or should we just drop the price by the amount? For agents, how much impact does having a bonus make on you showing the listing (assuming the listing meets your clients needs in the first place)?
FOR AGENTS AND HOME BUYERS - AGENT AND BUYER BONUSES - ARE THEY WORTH IT OR JUST DROP THE PRICE?
7 comments • Barry Wolfert • August 18 2008 09:15AMComments
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Hi Barry. Good topic. Just drop the price!!!
I always feel silly being offered a special bonus.
Ken
Actually, I think it really depends on the Supply and Demand of a specific listing, Offering Buyer bonuses as incentives lets the buyers agent know that the seller knows how to think out of the box, and will structure the offer to work the best to the buyers financing.
Offering a Selling Agent Bonus, works when there are several exactly alike properties, ie: 7 condo's all the same sq ftg, and floor plan, Only need to show 1 or 2 and if there is a bonus added most likley those will be the ones I choose.
When researching properties for a client I search by dollar amount. (i.e. Price is from this to that, usually going $10,000 above their max to make sure I get the overpriced properties.) From viewing properties, when it gets narrowed down to three or four I break down prices and incentives to give the client the true cost.
So incentives do not play until the client has seen the property.
I look at it as the buyer wants the property, this is the price they are willing to pay for said property and if they want an incentive; we will write it in the contract and see if the seller will make the concession. It may take a little longer to negotiate all the details but I find it works best.
On the selling side I price the property according to comps and recent sales. When we get an offer the buyer can ask for the incentive.
Hi Barry, Personally, I don't search by this criteria but my bet is that there are many agents who would at leasrt include a bonus listing on their short list. SO, I guess it probably does work .
A bonus is great, but, it has no effect to us as far as which homes to see. I just luck into it every now and then...
If the bonus is being paid by the seller, then I would just drop the sales price. As a buyer representation specialist, I don't allow bonuses or less than average commissions impact my approach to getting my clients into the home of their desires. The reason is simple. If my clients are happy, they will send my 6 more clients to work with me.
The sums of those commissions are much more important AND VALUABLE than a bonus on ONE transaction.
That's just my $.02.
Barry,
In the old days where agents did the searching and the buyers were not able to search for themselves online, the agents was the conduit through which the showings flowed. With the buyer largely doing the searching and prompting the agent for the houses they really want to see, I think the best price possible and not offering commission gimmicks is going to give you the best bang for the buck. Who knows, the better the price, the higher the liklihood of multiple offers...
Good luck
Aaron