Every time the market takes a dip and sales slow down a few things happen in our Realtor community.
Discount brokers go out of business. the number of fringe Realtors leave the business, and sellers start paying bonuses.
Bonuses? For selling your property? We already get paid for the services we provide the sellers, who pay whatever negotiated commissions they agree on. The way it works, if you are selling the property, the selling commission is split between the seller's and the buyer's agents.
But in this kind of market, I am sure you have noticed certain inducements. Developers usually throw in either cash or other inducem,ents to help sell their properties, and home sellers seem to follow suit, I assume on their Realtors suggestion or just by thinking that that extra few thousand dollars may induce the buyers agent to bring in a buyer.
For your information, home sellers inducements are not public. They are usually directed at other agents to help bring in the buyers.
Why is that necessary? If your property is properly priced there should be no need for any cash inducements to Realtors, of all people, to bring in Buyers. That is their job, after all.
As a Buyer, you deserve a Realtor service that presents you with all the best deals that match what you are looking for, and not just the ones someone thinks you should look at and buy.
If you knew that there was a substantial bonus to the realtor on a home he is trying to sell you, would that make a difference? Of course it would. You may want to know why is a bonus being paid to a Realtor when you are the one buying the home.
In all fairness, when the offer is written, all inducements and bonuses that are being paid, either to the Buyer or a Realtor, must be disclosed. But only at that time.
Woukld you be excited about the listing if your agent said, before taking you to the property, You know Mr. Buyer, I would like to show you this property because I can make an extra $10,000 for selling you this home.
You don't think it happens?
Recently I received a flayer with 2 properties, (same agent), each one offering the selling Realtor a $50,000 bonus.
Both properties were listyed at the same price of $1,750,000. The bonus equals almost 3% of the selling price.
One of the properties was on the market for over 70 days and than terminated. This property was overpriced and it looks like the seller just went fishing to see what will happen. What about the agent that took the listing? Did he explain the market conditions to the seller? Was a proper CMA conducted? Buyers are not stupid and their agents know where the market is. Waste of time for both the agent and the seller.
The other property, sold within a month. The property sold for almost $300,000 under list price, in line with other properties selling in the area, so the bonus offer didn't do anything other than, if the seller paid it, just extra money out of the sellers pocket. The property sold because it was a unique property that would appeal to certain buyer who is willing to pay and buy now. Again, it only proves that if the property is properly priced, it will sell in any market.
Moral of the story? You don't need to pay abonus to sell your property. The buyers agent is alrady getting paid by the seller anyway. Best solution, price the property to the market. Good deals always sell.
If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call me; Jeff Stark, 604-506-8481 or email; jeff@jeffreystark.net
