I have offered it to agents that have come to the brokers open. I have offered them the bonus as a thank you for coming to the brokers open and have even had my sellers offer to pay the closing costs for their clients as a thank you for coming to the brokers open.

Todd Clark

I have been trying to use them more and also higher selling agent commissions. I have found that the selling agents work harder on them, and I think it does increase traffic. I might add one to the showing list if I was showing houses in the area, but I will show everything.

Bob Mitchell

Well, I have had several very hefty bonuses and it hasn't seem to have much affect on the amount of agents showing the home. But then I am in an area that the market is saturated with listings (Top 20 in the nation) and with a very low 4.2% absorption rate for the month of January. So, I'm not sure if that is a good gauge for your question. Both of the homes that offered them were also at the top of the price ranges for the area instead of the bottom where they "should" be. The ones that are priced to sell in this market do not have bonuses offered and are getting a great deal of showings. So, I would have to say that it really doesn't matter if you look at it from that standpoint.

But I was at a CE class a few months ago. We were standing outside and I was standing in a crowd of several agents. Two of the ladies were discussing whether they show homes or not that do not pay a specific amount in co-broke. These two ladies said they don't and that they had just recently figured out how to not allow the buyers too even see them in their searches by creating a custom search with the co-broke as part of the criteria. Now, I thought that this was illegal or at least against the ethics. I know I don't practice it. I think it is just wrong and that an agent that does do it is not doing what we, in my opinion, are obligated to do for our buyers no matter what the brokers office is offering - getting the best deal for their money. And if we aren't showing them some properties that might be a better deal then are we?

So having some type of bonus may not even matter if the agents aren't seeing them in the buyers searches because they are customizing their searches to only show a certain percentage. I suppose if you were offering the bonus in the percentage being offered that it would be more effective. But if not, then you are relying on the agents either seeing it in your remarks or hearing it directly from you or some other technique you are using to notify the agents of the listings you have.

Bottom line...I am not sure it is effective at all.

I think that listing agents should be working for the sellers and reduce price so the buyer can by at a reasonible price.

If all agents stick with the 3% on the buyers agent we need to focus on the buyer.

I agree with you Ron. "Sticking" is a word we should not be using or even discussing. It is up to each agent what we charge and what we offer. You are asking to have your local Real Estate board investigate you for price fixing talking that way.

Todd

A BTSA *shouldn't* work!  An agent that picks and chooses what houses to show based on bonuses or co-brokes is one lousy, unethical agent.

I you want some sort of minimum compensation, then have your buyers sign an agreement to pay you whatever amount you're asking for, and reduce that amount by the bonus/co-broke received from the listing broker.

Agents standing around saying, "I won't show homes below X% co-broke" and screening out listings based on the co-broke ought to lose their license. Period. That is ridiculous and a big factor in what gives this profession a bad name in many people's eyes.

To be blunt, that kind of attitude makes me sick.

And remember folks, RELiberation posts can be seen by anyone.  Investigations may not be limited to just local boards. The DOJ is just waiting to pounce on certain statements and perceived practices.

I have to agree with Jay & Fran on this one. I personally do not check the commission % when I am showing homes to clients. And I do not agree with giving agents a bonus to entice them to show a home. I would rather have the vendors reduce the listing price instead of giving a bonus. Also, how would your buyers feel knowing that you might of steered them towards buying that home just so you could get a bonus.

Do you even disclose to your buyers that you are receiving a bonus (it is law here in Ontario to disclose any extra fees you might be receiving).

<<Re: lower co-op fees: These two ladies said they don't and that they had just recently figured out how to not allow the buyers too even see them in their searches...>>  

Wow!  Boy I would have LOVED to have been there and heard these agents say that.  They would have gotten an earful from me for sure. What a couple of useless, GREEDY agents.  They don't care about their customers, just about themselves.  I think they should loose their license too!

I don't get all the "fair co-op commission" stuff to be honest.  What's fair and to whom?  3%?  4%?  5%?  2.5%?   If you have a buyer purchase a $300K home and the co-op is 2.5% is that not enough for you?  It's enough for me.  

On the other hand, if the homes in your area average $100K, then I understand that you have to earn a living, so I know there are two sides to every story... but I would NEVER not show a home to buyers because of the co-op fee was lower than I think it should be.  

Unfortunately, I have overheard agents say the exact same thing in my "old" office (won't show a home if less than 3% co-op) and you know who they were?  Mostly agents who have been around for 10 years or more and are just mad that the "3% average" is slipping.  That may have been OK 10 years ago when homes were half the value they are today, but IMO things are changing, and you need to roll with the punches.

Buyers can search on-line and call the listing agent directly - completely by-passing buyer agents.  Are you prepared for that??  Ask your friendly travel agent about what happened to their business since the introduction of all the discount travel web sites.  Even auto & home insurance is getting on the "information highway" thing.  

Bonuses - there are listings up the ying yang around here offering above 3% co-op and builders are offering bonuses everywhere... and the homes still sit.  It's price, price, price.

Just my 2¢. OK, I feel better now :)

I have offerd it to clients during listing presentations as an option to use to increase traffic.  It also depends on the clients situation.

We are all in the Marketing Profession. It is another tool to market your clients home to other agents and more than likely it is another agent who sells our listing.

In a perfect world it should not matter but that is not the case.  I think the majority in the real estate field are in this profession to make a living and we are in the "sales" business. My first concern is my client wether it is the seller or the buyer. If I take care of them regardless what I make on this thier currect transaction in the long run it will pay of many times in referals.

Many agents only long at the short term. What am I going to make on this deal?  I have had an agent call me and ask if I  would pay her .50 more since the other homes she was going to show all oferred more.

Does it increase traffic? Sometimes I think it does but it still has to be the right house for that agents client.  On the other hand if you get no traffic you will get no offers.

Jay commented: "A BTSA *shouldn't* work!  An agent that picks and chooses what houses to show based on bonuses or co-brokes is one lousy, unethical agent."

Well, Jay, you and I agree on yet another point... but we are both wrong according to the NAR Code of Ethics.  I found out the almost-embarrassing way.  I now realize that my own "personal" code of ethics is a bit stricter than the official code.

We took a listing a few months ago at a very low commission.  The sellers were our buyers 2 years before and were now in a financial bind due to circumstances beyond their control and needed to bail on the mortgage.  Our side was barely enough to pay marketing expenses but because of their unique situation our broker agreed to taking the listing at a break-even point.

We received a call from an agent wanting to show the home IF WE WOULD AGREE to paying him 3%... otherwise, no-show.  We explained the situation to him and his reply was a curt, "Not my problem. Goodbye."

We were stunned!  Susan had taken the call and didn't know what to say.  I said, "There's no way that is ethical.  I'm not even so sure it's legal."  Our broker agreed with us and we decided to report the agent to FREC (Florida Real Estate Commission).  However, being the anal-retentive person I am, I wanted to be absolutely certain of my position before causing trouble for another agent.

Well, to make this long story short, I WAS WRONG.  It is not only legal and ethical but the agent did exactly what is required by the Code of Ethics.  He called to negotiate his commission PRIOR TO SHOWING the listing.  Had he shown it and then tried to make it part of the offer, he would have been in violation.

So... I learned something new regarding Real Estate Law and Ethics.  But I still think IT STINKS!!!!  I'll stick to my personal code - doing the BEST thing for my customer is far more important than a few extra dollars in my pocket any and every day.

Our job is to help our buyer find the perfect home no matter what the co-broke commission or bonus might be. How would you feel if you are at the closing and your buyer looks at the hud and sees a gigantic bonus that they paid for you to help them buy the home and during the home search, this is the house you highly recommended they purchase instead of others that were similar.

What do I mean when I say they paid, doesn't the seller pay and the buyer uses the services of an agent at no cost?

The seller does pay the commission from the PROCEEDS of the sale paid or financed by the buyer.

We don't offer bonuses and we don't pay attention to any that are offered.  I send any listings I think my clients may be interested in regardless of bonuses or commissions.  Sometimes if we take a listing at a lower commission for whatever reason, we will take a half percent of our cut and leave the buyers commission as it always is.  That way if agents do pick and choose based on commissions, they would still choose ours.  

I never make bonuses or co-broke amounts a criterion when helping my buyer clients find the right home for them, so I know that listings with those incentives were not shown more or less by me.  With that said, I think it is nice to get an extra percent on the selling side once in awhile, it makes up for all the times I have been burned by totally unethical members of the public who think it is perfectly okay to take advantage of my time and effort and then purchase a home without my participation.  I know we are supposed to be protected by our agreements, but trying to enforce our agreements costs more in time, money and effort than we would have made on the sale, thereby profiting only the attys.  As Sergeant Barnes would say "take the pain....".

However, this discussion has focused mainly on the ethics point, not the effectiveness of the technique as a marketing tool.  I don't know how effective it is to add an extra percent on the listing side.  I have not seen anyone reply with any statistical evidence one way or the other.  I am not sure how you would go about tracking it anyway, maybe not offer it the first month and then offer it the second month and track the showing rates?

I would employ it more often if I could statistically prove that it works.  Has anyone actually tested and tracked results?

In reference to Lucia's statement:

"I would employ it more often if I could statistically prove that it works.  Has anyone actually tested and tracked results? "

Unfortunately this would be very hard to prove wether it works. for example you take a listing on a 300k home and for the first month you offer a 3.0% cobroke. You get 4 showings for 1 month. The next month You change the cobroke to 4.0% or offer a 3k selling bonus. In this month you get 7 showings.

That is a 75% increase in showings  but the problem lies in that you can not pin it down to the bonus or additional cobroke. It may seem like that is what caused the rise but could it just have easily been a pick up in activity?

Interesting!   I received a call from an agent asking for a high percentage before the showing.  When this agent went into show the property, it was not for purchase but for gaining ideas/concepts to build a similar one.  

Now I am going to check to see if it is legal when interviewing buyers to let them know if it is legal to tell them that "all agents don't show you everything based upon commission" - this is for the birds.  Whose rights are being violated?  the consumers, when they don't have access to everything.

I even show my clients unrepresented sellers, expireds, and cancelled listings - I have the seller sign a showing/commission agreement before I go into the house with my potential buyer.  

Of curse it works I agree that a agent should not push a property to a client based on the commission but if you choose to begin marketing a property you would start to search which one would be more rewarding

If you put too many expectations into this it might disappoint you but its just common sense you get what you pay for

In my previous career, executive recruiting - my firm charged higher percentage fees that our competition - on purpose.  In the wild, wild west of the recruiting world, fees were all over the place from flat-fee to 10% of salary, to 30% of salary plus bonuses.  In other words, the fees were very negotiable. It left the impression with corporate clients that your fee could be wittled down to nothing if they simply asked.

So to position ourselves we charged 30%.  Take it or leave it.  We would negotiate on repeat business, or loyalty clients as I call them.

The similarities between recruiting and real estate are extreme.  All fees earned are on contingency, second place is worth nothing. For the 30%, we completely committed ourselves to the assignment and guaranteed our results - importantly, in writing.  They key point here is that every assignment we take (listing or buyer's agreement) is in writing.  Professional Realtors disclose EVERYTHING to clients and customers, and it is this disclosure in writing that guarantees our consumer clients are protected.

Seller bonuses, buyer bonuses, 'in contract by' dates, etc are all fine provided it is disclosed in writing to all parties prior to their engagement. Anything short of this is unethical, whether you are in real estate or not.  

Who can honestly say that when scanning the MLS, when they see a $10,000 bonus to be paid to the selling agent that they don't pause for a minute and say 'who do I know that would be interested in buying that property?".  I think it's a great selling tool, with the proper disclosures of course.

I believe it's better to offer a higher commision rate. I was dealing with a bank who would not offer a higher commision rate for the buyer agent. But they did offer a SELLING bonus of X amount. I finally had to spellit out to the bank that if they dropped the selling bonus and RAISED the commision it would look better to the agents, they would save money, and get more showings... Which they did.

I don't believe in offering a selling bonus, but to each their own.

It depends on the agent and the area. In this selling area people get all hyped up over a high commision rate, even though it's really only an additional $250 - $350 per 100,000 on average...