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With the downturn in the economy, the cruise line industry has been hard hit. Some cruise lines are paying as much as 25% of the base fare, as commission, to travel agencies who market and book cruises on their behalf. This is on top of the cruise line's own budgets to market their own cruises to the general public.
Sellers are free to compensate agents in any way they deem to be effective. Some sellers, some of the time, will provide extra incentive to increase the number of showings and likelihood of a sale.
If the price/location/condition is not cometitive, the bonus is meaningless and the house is not going to sell.
Many agents aren't crazy about FSBO properties. The most common reason is that the selling agent will need to do the work load for both sides of the sale. Before becoming a licensed broker, I had sold a property FSBO. It was ok, I did a lot of work and it got sold but I came to see it would have been easier if I had it listed with a broker and negotiated a good commission.
From what I'm reading on the replys there seems to be a misconception that a commission is "regulated", it's not. A commission is negotiated. Any selling bonus or selling incentive that the seller or broker may wish to offer is a matter of marketing. All commissions and any type of bonus is to be listed on the settlement statement - for the eyes of everyone, the buyer, seller, lender, and both agents, closing company, etc.
Will a bonus paid to the selling agent help sell a property? ... hum... it's a marketing question. There are all kinds of ways to market a property, print ads, open houses, flyers, the local MLS, yard signs, on line marketing, etc. It's sometimes hard to know what actually works.
I'm going to list FSBO soon but I fully expect to pay an agent who brings someone in, I do not expect anyone to work for free. In fact if that agent is willing to do the closing paperwork I'd pay an hourly fee to cover it. Attorney or agent I'll have to pay someone right? Like I've said before I don't like having to bribe an agent to show my property above a normal commission.
I'm going to list FSBO soon but I fully expect to pay an agent who brings someone in, I do not expect anyone to work for free. In fact if that agent is willing to do the closing paperwork I'd pay an hourly fee to cover it. Attorney or agent I'll have to pay someone right? Like I've said before I don't like having to bribe an agent to show my property above a normal commission.
Yuu will pay an attorney, or title company, regardless of whether or not there is an agent involved.
As far as bonuses go, and the fact that there is no such thing as a "normal commission;" isn't it great to be able to choose your personal marketing method with no one telling you what you can and can't do to promote the property?
I think so.
Brokerages do not get together and decide commissions - that would be price fixing. The bonus is designed to entice the agents to show the property. If an agent shows properties based on the commission that would be a problem but I do not think that happens very often. Most buyers would know if they were being "steered" to a property, which is also illegal, in Texas anyway.
The standard is 6% but the sellers can decide if they want to pay less or bonuses. Some discount brokerages advertise less. Many builders offer bonus commissions and bonus to buyers. This is not unusual in Texas. A bonus is a great motivator to show a property that your client may have passed on if they know that the agent is going to contribute the bonus.
So what's the problem? If it is disclosed, what does it matter?
however you guys want to slice and dice it, it still encourages bad behavior to realtors (showing homes to clients that would be in the REALTOR'S best interest, but not necessarily the clients)
Simply get rid of it and we won't have this discussion....
however you guys want to slice and dice it, it still encourages bad behavior to realtors (showing homes to clients that would be in the REALTOR'S best interest, but not necessarily the clients)
Simply get rid of it and we won't have this discussion....
Thank god for capitalism & the ability to make a deal / offer incentives. If I owned a house and was in desperate need to sell I would want to have the ability to offer twice the going commission if I thought that would sell my house.
What you are purposing speaks of more Obama Socialism. Let's fix prices, limit wages and any bonus that you might earn from your hard work. That way everyone will be equal and no one will get rich off the downtrodden.
As long as I take care of my clients best interest, the money I make should be what I determine as long as we disclose and agree.
however you guys want to slice and dice it, it still encourages bad behavior to realtors (showing homes to clients that would be in the REALTOR'S best interest, but not necessarily the clients)
Simply get rid of it and we won't have this discussion....
The seller determines the bonus or not. FSBO and Flat fee listings are just as apt to carry a bonus as those listed with full service agencies.
The seller determines if it makes sense or not to get more showings by offering a bonus. Again, a bonus can't sell a home that is not priced to the market, based upon condition and location. A bonus cannot sell a house to someone when the house does not meet the buyer's needs.
And there are indeed other agents like me who disclose and agree to rebate the bonus before we walk in the door. In other words that bonus becomes my buyer's advantage which just might compel them to buy the bonus home, versus one without.
Having said all this, only a small portion of listings in my area carry a bonus. I have yet to see one that sold for more than I thought it would.
Buyers are not sheep. They see the competition and tend to know the market better than the sellers.
The standard is 6% but the sellers can decide if they want to pay less or bonuses.
In my area, most listings are at 5%, split 50-50 between the buying and listing brokers.
Failure to disclose makes me very uncomfortable.
I make the business decision to rebate any bonus and my client's know this, going in the door.
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