Gotcha Guide™: Agent Bonuses are Bunk! Offer Real Incentives

NOTE: This article is part of the forthcoming book, the Gotcha Guide™ to Buying or Investing in Real Estate. By DeeinAustin™

Now that the mortgage market isn't so hot, builders and home sellers are super hot-to-trot on buyer agent bonuses. They think agents will be more motivated to show their homes if offered extra monetary incentives.

Here's how a buyer agent incentive is cooked up:

INGREDIENTS & DIRECTIONS (TASTY BUYER AGENT BONUSES)

Step 1:Take 2 cups of a Seller with an over-priced home.

Step 2: Whip in a heaping mound of a Cooled Real Estate Market.

Step 3: Drizzle in 1/2 teaspoon of a Listing Agent willing to "try anything".

Step 4: Pile on $5000 worth of a Buyer Agent Bonus.

Finally: Sparingly sprinkle on Potential Home Buyers and Top with a Smart Buyer's Agent.

COOKING INSTRUCTIONS: Half-bake until the home is taken off the market, the seller lowers the price, or you offer a real incentive that meets the buyer's needs.

WHY BUYER AGENT BONUSES SOMETIMES WORK

If your home sells because of a buyer agent bonus, it's because you changed our formula.

1. Swap out the smart, ethical buyer's agent with a greedy, Easy-Money Agent who values a trip to Cancun more than their client.

2. Ensure that you have an uneducated buyer who isn't aware of the bonus, home values, and/or isn't sharing the bonus.

PROBLEM: Many Easy-Money Agents are getting out. In leaner times, agents who aren't dedicated stop getting referrals and leave for easier ways to make money. In this new market, their gravy-train has stopped.

DON'T CATER TO THE GREEDY SALES AGENT! USE THESE 5 PROVEN WAYS TO GET YOUR HOME SOLD...NOW!

1. Match the features with benefits. Display numerous photos and describe the home in a refreshing, alluring way. Write longer sentences that capture the buyer's imagination.
2. Stage the home. Your home needs to look, feel and showcase like the new home where someone will raise their children, relax, retire, and entertain friends.
3. Minimize the buyer's expense. Pay a portion of the their closing costs or loan discount points.
4. Complete repairs. Buyers want to be proud of where they live without hassle. Repairs are better, but if needed, offer an allowance. 
5. Help them qualify. Take a second lien, lease option, or a seller financed note. Each one of these can be separate topics, but they provide a motivated buyer easier access to financing.

WINNING ARTICLE ! RUNNER UP IN THE NATIONAL CARNIVAL OF REAL ESTATE . Called an "Essential Read" by Political Calculations.
-All rights reserved © Dee Copeland 2008

Comments

[Big Bear Real Estate - Tyler Wood]

Very creative and to the point Dee. What about the correct price though? That should be #1 on the list. In my opinion, without the right price, nothing else you do will matter.

[Dee Copeland]

Thank for the comment! I think the point of the entire post is to price it well or lower the price. If sellers miss the mark, they have options, but buyer agent bonuses shouldn't be them.

I was in a market update class today and they stated that national builders had been offering 9-10% commission for agents here in Greater Austin for the past few years to spur rapid sales. I think that's absolutely ridiculous and only means they're charging you 9-10% more than what they can afford to pay.

They're getting pretty creative now that mortgages are tougher to get, but I hope they realize they only need to offer the best price for the features.

[CJ Brasiel]

Although I agree with you that the price should be right, sometimes the only way to get a stubborn , unrealistic seller to see the light is to get an offer. If the buyer's agent is worth their weight, they will advise an appropriate market value. When I can't even get the house shown because of the price, I offer agent incentives. When they call me to find out what the incentive is, I inform them that I will present ALL offers.

Sometimes there are reasons to work with an unrealistic seller. If they have multiple properties and building a relationship is better than a quick sale, I will deal with their stubborn traits on the first home.

It may not be a perfect way of doing business but not all agent incentives get passed on to the buyer.

Just a thought.