In this market I am seeing numerous sellers and seller’s agents offering bonuses to buyer’s agents for selling a property in a certain time frame. This may make me unpopular but I think it’s a very bad idea.
Whenever I see this I immediately assume the seller is very motivated and therefore will take full advantage of that. I also point out the bonus out to my buyers, for a number of reasons including Full disclosure. Another reason is for liability purposes. Once this is pointed out you can feel that awkward silence as the property is no longer the focus. You can see the realization on their faces and it almost incapicitates anything I might say about the property after that unless it is deragotory towards the property. If I do say anything positive about the property my client can’t help but think I’m just pushing them to this home for the extra cash on closing.
Any agent worth two cents is going to disclose this financial issue to their clients, and if they don’t, woe is them if there is ever a problem because regardless of their motivations, after the fact it will appear as though they were financially motivated.
From the buyer’s perspective if there is a problem with the inspection or condo documents during the transaction or any other issue, this may again come up as a factor in their mind as their agent gives them advice. So from my perspective offering a bonus to the buyer’s agent may do the reverse of what its intended to do.
P.S. One way I do handle this situation is tell the buyer that I’ll rebate the bonus back to the buyer. This article is only in reference to bonuses offered to sell a home faster, not the actual buyer’s agent’s commission.
Are not all sales by a real estate agent motivated by money.
Ah come on! Give the guy & gal a break!Not all realtors are crooks looking for easy money. I know some decent used car salespeople too for that matter. Theres good and bad in all people Hey, there are even some MLA’s who have integrity. At least these two are putting in an honest effort.
Sheldon, are these bonuses publicly disclosed on a document or are they between the agents in the kitchen while the buyers are looking at the bathroom?
Yes they should be disclosed. Most, I repeat most Realtors I know feel the way I do. But like the first commenter said some sellers believe Realtor’s are motivated solely by money. That is simply not the case. I brought it up because I see a growing trend in buyer agent bonuses. Its just good to be aware. A seller offering a bonus is generally very motivated in my opinion and has flagged themselves for a much lower offer then they might have received otherwise.