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Old 11-24-2007, 06:57 PM
 
Location: Nashville, TN
1,177 posts, read 3,939,855 times
Reputation: 938

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I posted this on an another thread and didn't get any response. I'd be interested in hearing from some realtors.
My position on a Buyer's Agent Bonus may be state specific. I'm a realtor in Tennessee, and in Tennessee we are required to tell the buyer client upfront what our fee for services is. My fee is typically a percent of the sales price. In most every instance, the seller will pay this fee or a large portion of it. The buyer is responsible for any portion of the fee that the seller doesn't pay. In doing this I have agreed to provide the full range of Buyer Agent services for that fee. If a bonus is offerred that pays me above and beyond what I originally agreed to then I don't believe that I am due that bonus. In my opinion that bonus should be applied to a reduction in the purchase price of the property or be applied to the buyer's closing costs and prepaids. It is definitely in the buyer's best interest to do this and I believe it is the right thing to do given that I've already told the buyer what my fee is. I'm not keen on changing the rules in the middle of the game and I don't even want the perception that I might be 'steering' that buyer because of a bonus I might receive.
A question I would have is, if a realtor tells a buyer upfront what their fee is for their full range of services, and the realtor is then offerred a bonus in addition to the agreed to fee, what is the justification/rationale for accepting the bonus? What other services are they providing above and beyond "their full range of Buyer Agent services"?
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Old 11-24-2007, 07:47 PM
 
Location: Mesa, Arizona
13 posts, read 37,671 times
Reputation: 15
Hmmmm......

Where is this bonus coming from, and who is offering it? Are you talking about New Home incentives, or broker bonuses, or what?
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Old 11-24-2007, 07:53 PM
 
Location: Nashville, TN
1,177 posts, read 3,939,855 times
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Quote:
Originally Posted by iworkwithdummies View Post
Hmmmm......

Where is this bonus coming from, and who is offering it? Are you talking about New Home incentives, or broker bonuses, or what?
The bonus would come from whomever is selling the house.
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Old 11-24-2007, 08:32 PM
 
Location: Northern NJ
1,171 posts, read 3,005,024 times
Reputation: 578
I've read more about this -- sellers "throwing" in another X% for the buyer's agent -- than ever before. Understandibly so of course. I've had numerous brokers push to have my friends, clients put up an extra X% to the buyer's agent.

I've been a witness to some very interesting conversations as well, LOL.
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Old 11-24-2007, 08:43 PM
 
Location: Nashville, TN
1,177 posts, read 3,939,855 times
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Does anyone have any answers to the two questions in the last paragraph of the Original Post?
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Old 11-24-2007, 09:32 PM
 
Location: Vacation central.. :)
882 posts, read 3,368,070 times
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The only rationale I could come up with would be a scenario in which both the buyer has such a pleasant experience that he/she feels justified to give that little something extra in the form of a bonus.

I guess I would liken it to a tip given to a server who does a great job. You know that the 'typical' tip is 15-18% but theer ar ethose times where you leave 20% and more when you get that 'special service'.

Not sure if this is the answer you're looking for or not, but it's the only real justification I could come up with...

Quote:
A question I would have is, if a realtor tells a buyer upfront what their fee is for their full range of services, and the realtor is then offerred a bonus in addition to the agreed to fee, what is the justification/rationale for accepting the bonus? What other services are they providing above and beyond "their full range of Buyer Agent services"?
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Old 11-24-2007, 10:32 PM
 
Location: Northern NJ
1,171 posts, read 3,005,024 times
Reputation: 578
Quote:
Originally Posted by gbone View Post
I posted this on an another thread and didn't get any response. I'd be interested in hearing from some realtors.
My position on a Buyer's Agent Bonus may be state specific. I'm a realtor in Tennessee, and in Tennessee we are required to tell the buyer client upfront what our fee for services is. My fee is typically a percent of the sales price. In most every instance, the seller will pay this fee or a large portion of it. The buyer is responsible for any portion of the fee that the seller doesn't pay. In doing this I have agreed to provide the full range of Buyer Agent services for that fee. If a bonus is offerred that pays me above and beyond what I originally agreed to then I don't believe that I am due that bonus. In my opinion that bonus should be applied to a reduction in the purchase price of the property or be applied to the buyer's closing costs and prepaids. It is definitely in the buyer's best interest to do this and I believe it is the right thing to do given that I've already told the buyer what my fee is. I'm not keen on changing the rules in the middle of the game and I don't even want the perception that I might be 'steering' that buyer because of a bonus I might receive.
A question I would have is, if a realtor tells a buyer upfront what their fee is for their full range of services, and the realtor is then offerred a bonus in addition to the agreed to fee, what is the justification/rationale for accepting the bonus? What other services are they providing above and beyond "their full range of Buyer Agent services"?
OK, personally, I don't get it. First, perception can become a reality so I think you are on point with regard to your client's (the buyer) perception. While there might not be any "steering" whatsoever, it's about what the buyer things, feels, etc. I am not an agent so I can't speak from actual, practical, everyday experience -- however, I am a deal-maker and I do work in many settings on a commission, and I live every single day by being up front with the client, complete and full disclosure and always doing what's right by the client -- first, last and only. Period.

Second, are you playing the role of a "buyer's agent" here? I am not sure how it works in TN, but my experience in working with agents everyday is that they don't know what they are making until they find a house that I like, want to make an offer on, etc. I ask before I make an offer, what the % is, and the split, but I am not sure how that plays out before the fact.

Regardless, I expect and demand people to be up front with me as that is the way I am with them. I like the mindset you have here.
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Old 11-24-2007, 11:02 PM
 
Location: Hernando County, FL
8,488 posts, read 19,393,030 times
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If I have a buyer looking for a house there will be listings offering from 2% on up. If they find a house that suits their needs and the price is in line with what other similar houses are going for then what I make is what the seller is offering. Be it 2%, 3%, 4% or 12%.

We have a subdivision here that the developer is offering 12% to the buyers agent and resales are offering 3% from the owner. Which one should I sell?
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Old 11-24-2007, 11:10 PM
 
1,174 posts, read 6,656,968 times
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Quote:
Originally Posted by Mike Peterson View Post
Which one should I sell?
The only answer is, "The one that best meets the buyers' needs." Any other answer is, well, unprofessional at best but likely much worse.
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Old 11-24-2007, 11:18 PM
 
Location: Hernando County, FL
8,488 posts, read 19,393,030 times
Reputation: 5397
Quote:
Originally Posted by garth View Post
The only answer is, "The one that best meets the buyers' needs." Any other answer is, well, unprofessional at best but likely much worse.
And that is the right answer but here comes the kicker. The developer is selling the same home as the private owner for $50,000 less. There are some that will say I am only pushing it because of the 12% but in reality the buyer gets a the same home for $250,000 instead of $300,000.
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