Comments on: A Commission is Prize Money (?!?)

By: Jon Boyd@Ann Arbor real estate

Jon Boyd@Ann Arbor real estate — Mon, 10 Nov 2008 02:37:12 +0000

Good to see your post on the topic.

As the broker of an Exclusive Buyer Agent office I’ve never discussed the “bonus” idea with a seller, because Exclusive Buyer Agents never list property. But I have many times discussed it with buyers and reporters.

I know it doesn’t carry any weight with our agents, but in our market many real estate companies give their “designated buyer agents” a higher commission split if the “sell” an in-house listing.

Does this work? Probably so, or they wouldn’t continue to offer it.

Is it unethical for “designated buyer agents” to steer buyers to a listing based on the compensation? Absolutely.

But since these same agents aren’t ethical enough to even tell the truth about being designated buyers agents and not buyer agents, it shouldn’t be a surprise.

These bonuses are usually called “buyer agent bribes” on the buying side of the business.

By: Jenny

Jenny — Tue, 14 Oct 2008 07:20:39 +0000

wow what a nice post about coupons and retail information.
Its a very needed information because i need some coupons to buy somethings.

By: Chris Dowell

Chris Dowell — Wed, 07 Nov 2007 21:13:48 +0000

I have been offering higher commissions and bonuses to buyer’s agents. It works a little. Lately, I have been having seller clients make offers to buyers. My latest is a seller client that is offering a New convertible BMW to the home buyer. http://BMW.DowellTaggart.com

By: The Odysseus Medal competition — Voting for the People’s Choice Award is open | BloodhoundBlog: Real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments

Mon, 05 Nov 2007 15:18:47 +0000

[...] — La spinster?, Mademoiselle? Oui. La Spinster?…ZUT!Jay Thompson — Prize money?, A Commission is Prize Money (?!?)Bill Leider — What is a professional?, What Is A Professional?Jim Cronin — RE [...]

By: Missy Caulk

Missy Caulk — Mon, 05 Nov 2007 11:55:23 +0000

Jay, I have a home listed now at 5%, from a relo company. When the sellers hired me, it was at 6%, I have had 2 showings since then, in 3 months. Before the sellers took their buy-out, I had at least 2 a week before that. In a buyers market, I believe Realtors do look at the compensation offered. I kept the listing when relo offered it to me, because most of my marketing and expenses were upfront.
I have had it painted, and staged since the original sellers moved out and it shows much better, ( too much country style) by the previous owners. I have discussed this with relo and they won’t budge, company policy.
I have helped several families move here,(with this company) but this is my first listing with them. I’m thinking about offering 3% and me taking less, just to get this sold.
One of my buyers who transferred here, their house has not sold in OH, offering the 5%. She told me the same thing. Why would a big company want to pay all the expense of inventory and not offer 1/2% more? I just don’t get it.

By: J. Ferris

J. Ferris — Sun, 04 Nov 2007 20:31:48 +0000

Thank you Jay! I’ve often found it very frustrating to come up with a concept that would explain commissions to the buyers while noting that some varying rates may not pay for the services rendered.

“For example, if I have a signed BBA at 3%, and the seller is paying 3%, then the buyer owes no additional commission. If the seller is paying less, the buyer makes up the difference. If the seller is paying more, then that additional amount is rebated to the buyer at close of escrow. This is all clearly discussed and disclosed up front. The buyer knows exactly what the numbers are before they even see the home.”

That’s the black pearl of the post. Thank you!

By: Brian Brady

Brian Brady — Sun, 04 Nov 2007 20:12:01 +0000

Jay,

Let me start off by saying that the “extra bonus” should not drive the home choices a Realtor shows his/her client…BUT…they do work. I’m assuming that many Realtors (like many mortgage originators) are self-serving.

Should a listing agent then use the greed factor when pricing a home? If we know the’re bums, should we play to their weakness and offer that bonus? More importantly, is it the listing agent’s responsibility to point out the “greed factor”, as flawed as it is, to every seller?

By: Bob in San Diego

Bob in San Diego — Wed, 31 Oct 2007 17:54:47 +0000

A few thoughts…

With so many buyers searching online via IDX prior to even contacting an agent, I do not believe that commissions play much of a part in determining which listings they want to see.

Agents who screen listings based on commission are not fulfilling the fiduciary duty they owe their clients.

In San Diego County we have already started to see lawsuits filed against agents and brokers by buyers who would have purchased a different property if their agent had shown it to them but didn’t based on commission.

If you are a buyer working with an agent, you need to ask the agent if there are any reasons or conditions that would impact their decision to not show you a particular listing that seems to match the buyer’s criteria.

By: Darla

Darla — Wed, 31 Oct 2007 17:32:46 +0000

Excellent post. Realtor incentives in my area (SoCal) just don’t work.
We are working for the client…not our own pocketbook.

By: Real Estate/Buisness News » Blog Archive » A Commission is Prize Money (?!?)

Wed, 31 Oct 2007 16:26:58 +0000

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