Seller Pay Me More - Buyer Trust Me!

I consider it an insult when a seller/listing agent offer the buyer agent a bonus. I alway have my purchasers reduce their offer by the amount of my bonus. I don’t want anyone to feel I pushed them to purchase something because I made more money.

On the other hand, I always advise my sellers to give the bonus to the purchaser in the form of closing cost help or a decorator allowance.

I just do not feel right about bonuses…yes, of course, I’d be lying if I said I didn’t want an extra $5000 or a new car…but I’d also be lying if I said I could accept such a thing and sleep at night knowing my buyers could have that much less on their mortgage or have had it applied to their closing costs.

I don’t think a bonus is necessary or ethical. The negotiated commission is enough. Give the “bonus” to the buyers, IMHO.

Phyllis and Karen,

Thanks for your comments, and may those with your attitudes multiply while the others leave the business.

Though there could possibly be a scenario where a bonus would be OK, it’s hard to visualize. How can you admit in one breath that you’re offering it in order to influence the behavior of the buyer’s agent, and in the next breath, say that it is ethical and the behavioral change wouldn’t possibly cause harm to the buyer client?

Thanks again.

Jim

What you are talking about is a conversation that happened in a little followed real estate forum about a hypothetical situation. I have been in the Real Estate Business for 4 years now and can think of only a few cases where bonuses were offered to the buyer’s agent. All of those cases were involving home builders who were desperate to move the houses they had built for deals that had fallen through. I have never seen a Realtor offer these kinds of deals and would not consider doing that myself. I have on the other hand cranked up the buyers agent commission to get a home to sell. Much of the additional commission from my side of the commission and the home buyers always know about it as they see it on their HUD-1 statement at the vary least.

On another note, why are you cheating people who post to your article by encouraging them to post by letting them put their website address but then putting a No-Follow tag on it so that they get no search engine credit for it. You’re lower than a Realtor!!!

In the case of a $39,000 bonus – obviously, the seller was willing to come off his price that much and in my opinion (along with Karen & Phyllis) that belongs to MY buyer. How can I justify taking a bonus over and above my already very fair paycheck when in fact, my BUYER is footing the bill, not the seller!?

Our duty is to our client, not to our paycheck. And, if we run our businesses that way, the paychecks will follow.

Thanks for all the posts. Thanks to Jennifer.

To J Boyer, I saw your post on the Agents Online Forum about the “no follow” on the links. Quoted: “I commented on his nasty little blog. The dirty little so and so is lower then a Realtor, I encourages people to post by offering to let them put their web address in, and then sticks a No-Follow Tag on it. In my book that is the equivalent of being a big fat lying used car sales person.” It is news to me, as I don’t have anything to do with how About.com builds the site and didn’t know about the no follow tags.

We encourage comments to generate discussion and debate that hopefully will help us all to do better at our jobs. Thus, if the link isn’t beneficial to your SEO, then I suppose you won’t comment here again. Your opinion is always welcome however, whether the robot follows your link or not.

I also did see a comment on the Agents Online site about their posts being exposed in this blog. The posts are public at that forum, and thus visible to all, whether real estate people or general public.

Jim,

First let me state that if you regularly read agents online you will notice that the agents on
the site appear to be very helpful, fair and honest to their buyers and sellers. As an agent
who offers an agent bonus on ALL OF MY LISTINGS, let me show how I use the bonus as a marketing
tool to get my clients home out in front of other agents! I charge 5% to list a house. Lower than
the average listing taken in my market. I offer a co-op of 2.5% and as the listing agent I make 2.5%.
Then out of my 2.5% I offer a 1,000 agent bonus. I offer that bonus on all of my listings and I do it
as a marketing tool to get my client’s home out to the other brokerages and have my clients home stand out among the crowd.
In case you do not get it let me spell it out. i pay the 2.5% co-op and the $1,000 agent bonus out of the
5% listings that I take. So show me how that is not in the best interest of my client. And furthermore if
I have the buyer on a deal that has an agent bonus, I would ask for that money to go towards my buyers closing.
Just for the record all monies payed are stated on the hud-1 as required by law! Instead of trying to make people
look bad, why did you not ask for further details or even go to the extent of sending a private message to some of the agents from agents online asking for a private 1 on 1 phone call to truly get to the bottom of what you obviously feel is so wrong. the toyota supra that I mentioned in the thread was actually a —FOR SALE BY OWNER— offering a car as an agent bonus, he was not even represented by an agent!!!!! The website that you pulled this information from along with your out of context quotes was horribly misrepresented. The website you pulled the quotes from is a great place for agents to learn about practices in the real estate field, and also a great place to trade ideas. Please do
not try and make it look like a bad place. There are more helpful people on there than you would know(I know because several agents from
the website have personally given me advice and opened my eyes to make me become more educated and ultimatley it benefits my clients.

Thank you for your time,

Estatereal

Estatereal:

Thanks for your comments. My first hour every morning is spent in reading Agents Online and other industry forums. I post comments there regularly, mostly answers to agent questions or links to resources. It is an excellent resource, and I haven’t criticized the forum at all.

Nor have I criticized or commented on the person who originated the discussion about the $39k bonus. It really doesn’t matter whether they were a real estate agent or not. The question wasn’t the problem. Some of the responses were in my opinion.

It’s also not disputed that the bonus would be disclosed on the HUD-1. However, I would be very nervous about my buyer first finding out about this huge bonus 48 hours before closing.

The problem is that, when it comes to ethics and conflicts of interest, the perception your client holds is what’s important. If they think there may have been a conflict of interests, then the damage is done.

I think it’s very service-oriented of you that you offer a bonus on behalf of your seller out of your commission. And it probably does generate more showings. It’s a strategy employed by many. The fact that it is effective means that it changes the behavior of buyer agents. If this change in any way means that the buyer client didn’t see a home that may have been a better deal or fit, then it’s a problem.

Putting ourselves into the shoes of a buyer who sees a $39k bonus added to a $21k commission might help. Just about any buyer might then analyze every bit of advice the agent provided throughout the process. A huge part of my value to buyers is helping them with information to make an informed purchase decision. Might this buyer wonder if I criticized other listings, provided modified information or overly complemented this one because of the bonus? The damage is done by the suspicion, whether there was a problem with my performance and advice or not.