Buyer's Agent Bonus vs Discount Price
I am often asked the question as to whether or not offering a bonus to a Buyer's Agent is a good idea. Along with that questions is the subordinate question of how much bonus to offer to get results.
Generally, this quesion is asked because the Seller wants to do something to help sell their home faster, or at a higher price, or both. Since Sellers save money by listing for a Flat Fee they often consider that some of that savings can be translated into quicker sale and higher price if they motivate the Buyer's Agents to show their home more frequently and to sell their home more agressively to earn the bonus.
I always recommend that instead of offering the bonus to the Buyer's Agent you reduce the price of your home to make it more attractive to more Buyers. By putting your home on a more affordable level you open it up to more prospective Buyers.
Agents have little actual control over a Buyer's response to a home. There is very little that an Agent can do to persuade a Buyer that any particular home is right for them. Most Agents will not attempt to do this since they are afraid that they will either be perceived as pushy, or they may be sued later for saying something that is positive about a home that comes back to haunt them when a problem arises.
Additionally, Buyer's Agents should, by virtue of their Code Of Ethics committment to keep the Seller informed, advise the Buyer that the Agent will earn a bonus or larger than normal commission on your home. Virtually any Buyer will, with that knowledge, try to negotiate with their Agent to have all or a portion of that Bonus rebated to the Buyer if they choose to purchase that home.
I have sold over 1,000 homes in the last couple of years and out of that number only one or two homes have sold with a bonus where the Seller felt that the Bonus was instrumental in helping to sell their home. I have had 40-50 Sellers offer bonuses and not receive any noticeable benefit from those offers. No additional traffic. No discernably higher sales price.
Simply put, offering more than the norm for the Buyer's Agent has little impact on either your rate of showings or your sales price. It is a far more powerful tool to apply the bonus to a lowered price, or greater negotiation flexibility, rather than to offer it to a Buyer's Agent.
Generally, this quesion is asked because the Seller wants to do something to help sell their home faster, or at a higher price, or both. Since Sellers save money by listing for a Flat Fee they often consider that some of that savings can be translated into quicker sale and higher price if they motivate the Buyer's Agents to show their home more frequently and to sell their home more agressively to earn the bonus.
I always recommend that instead of offering the bonus to the Buyer's Agent you reduce the price of your home to make it more attractive to more Buyers. By putting your home on a more affordable level you open it up to more prospective Buyers.
Agents have little actual control over a Buyer's response to a home. There is very little that an Agent can do to persuade a Buyer that any particular home is right for them. Most Agents will not attempt to do this since they are afraid that they will either be perceived as pushy, or they may be sued later for saying something that is positive about a home that comes back to haunt them when a problem arises.
Additionally, Buyer's Agents should, by virtue of their Code Of Ethics committment to keep the Seller informed, advise the Buyer that the Agent will earn a bonus or larger than normal commission on your home. Virtually any Buyer will, with that knowledge, try to negotiate with their Agent to have all or a portion of that Bonus rebated to the Buyer if they choose to purchase that home.
I have sold over 1,000 homes in the last couple of years and out of that number only one or two homes have sold with a bonus where the Seller felt that the Bonus was instrumental in helping to sell their home. I have had 40-50 Sellers offer bonuses and not receive any noticeable benefit from those offers. No additional traffic. No discernably higher sales price.
Simply put, offering more than the norm for the Buyer's Agent has little impact on either your rate of showings or your sales price. It is a far more powerful tool to apply the bonus to a lowered price, or greater negotiation flexibility, rather than to offer it to a Buyer's Agent.
posted by DallasFlatFee at 8:12 PM
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