Howard,

That is a hot penny!  I personally do not use an agent bonus to attract attention to a property I list.  I always tell the seller to just reduce the price by the amount they are offering as a bonus and hope to attract a buyer that way.

On the ethical side I think that rest with the individual agent. If the agent shows the property because it meets the customer's criteria I see nothing wrong with trying to place them in the home. I would however be careful to really listen to any objections the buyer might have.  I have sold several properties were a bonus was offered and I told the client before I wrote the offer I was getting a bonus if the sale was completed.

I have several times wrote a contract on a property and been surprised to find the commissioned offer was not what I had expected.  I would say 99% of the time I do not look at the split before recommending a client view a home.  The other 1% is rentals! I do look at rentals and if the offer of compensation is 10% of the rent and the property rents for $700 a month it is not worth the effort.  I will give the client the address and ask them to contact the listing agent for a preview of the property.

I think it really does bring in agents. I hate to say it but, we have all heard of agents saying they won't show a home, because it is with a discount broker and they aren't paying enough commission.

I don't look at commission at all. I look at is the home what my client is looking for! But when I am a sellers agent, I do what I can to get their home sold. I think the ethics comes from the other agent, if they are only looking at my sellers home because of commission, then they need to look inside themselves and decide what is ethical or not.

  I just sold a home with a bonus attached to it.  Then I made a concession of the bonus.  The builder and purchaser both got the

benefit of the bonus.  I primarily gauge the interest level of my purchasers and work the deal from that point.  We all should work hard to get our clients the deal they want, then a bonus is just that.

  I also offer bonuses to agents in order to get more traffic to a listing.

Sometimes it works.

Realtor, Columbus Ga

I usually always try to offer a 'Bonus' on top of commission. It just makes sense that when you have 3 or more homes on the same street or area, all with different split payouts, my listing will most likely be shown first. Sometimes it works, sometimes not. But in my kneck of the woods, we have to be VERY competitive being there is a HUGE  inventory, so, I try to stand out from all the rest with higher splits, and good bonus's....We have also taken the bonus away from a few agents too, with lower offers, as my clients are not willing to pay out more, and EVERYTHING IS NEGOTIABLE!! Including the BONUS!!

There is nothing unethical in offering a bonus.  Commissions are negociable.  If it brings in a buyer then a bonus is a smart move.

The ONLY time I like Buyer Agent Bonuses is when I collect them !!

I don't usually offer bonuses to the agents. The agents aren't buying the house, although some buyer agents give the bonus to the buyer. Any offerings to the buyer or agents should have an expiration date and not hold it out there forever so that your paying a bonus to someone who stumbles across the listing that the buyer would have bought anyway.

Search CT Listings at Http://realestatetorrington.com

I tried the agent bonus without much luck.  We're now redirecting that bonus to the buyer with a "Seller to pay $5K towards buyers closing costs with acceptable offer."

Now we wait...

I use bonuses and higher than normal splits to generate traffic, after all we need traffic to sell our listings. I've noticed that with the bonuses the buyers agent will set the showings even if the buyer did not pick it out saying we'll be in this area anyway so I set it up so we can take a look. Doesn't hurt and I believe agents will work harder showing the positives of the properties over the run of the mill I'll sell the next one doesn't matter normal split houses.

I also use bonuses and higher coop commission. When I added a bonus or increased the commission, in most cases I could see considerably higher traffic. ... well, actually, I should make a correction ... in most cases it's my sellers who offer bonuses ... not me!

I don't usually look at what the commision is if I'm representing a buyer ... just make sure there actually is a commission in the coop field. But I do know there are agents who go after the higher paycheck.

Howard says

"Anyway, it got me thinking about the possibility of selling agents pushing one listing over other competing listings"

What would be the point of offering bonuses /Higher splits if you did not want the selling agent to push your property? Is that not the whole purpose of it?  

If not why offer a bonus at all?

I always start with a fair and reasonable buyer agent commission.  From there, any additional incentives are for the buyer.  Our provincial legislation does not allow "bonuses" to the buyer's agent, though I could amend the listing contract to bump up the commission rate.

I have not been successful with bonuses in quite some time.  In my experience, typically they produce agents not very active in my market and it produces extra showings without results.  Obvious that the showing was agent's selection, not buyer's.

Have been successful in the past with condos that have extra supply (assuming they are relatively equal in upgrades, amenities).  

Overall, offering higher coop has been more effective for me. Of course, if my client selects a property offering a bonus, I'm never one to argue!

We are required to inform the buyer that a bonus is being offered. I have yet to sell a home to a buyer with a bonus but have shown a few. I always informed the buyer before the showing and let them know if they like the home we would negotiate converting the bonus into closing costs for them. My goal is to gain the repeat business or referral business by working for my client first as that will work for my business in the long run.

We will use a bonus or higher commission split to generate traffic on a listing.  It is customary in our area to add the verbiage "on a full price offer".  We don't do that (unless the seller mandates it and we try to talk them out of it).  I can't see forcing an agent to force their clients into making a full price offer to get the bonus, so to me it is a useless tool.

but my goal when offering a bonus is to generate traffic.  I want as many eyes as possible to "consider" this home.  A) even if that agent doesn't sell it, they have seen it and it may trigger something for a prospect of theirs or someone else in their office and B) hopefully I can get some good feedback on the listing to discuss with the client.

When I am a buyers agent, I don't look for listings with just bonuses or higher splits, however if I have to narrow down my list to show due to time constraints (we service  a lot of Military relocation), and 3 homes in the neigbhorhood meet the criteria and I can only show one, I may pick the one with the bonus.  All meet the criteria... and I am not putting myself above my client.  I can only choose one to show.  Now, what I do with that bonus depends on the client...

Shelly Constantz

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