Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Real Estate Professionals
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Thread summary:

Real estate: realtors, agent, home sales, mortgage, buy a house.

Reply Start New Thread
 
Old 11-22-2007, 11:13 AM
 
Location: Nashville, TN
1,177 posts, read 4,140,608 times
Reputation: 945

Advertisements

I have seen many posts in many different threads about realtors being offerred a bonus if they bring a buyer who makes an offer and closes on a house. The impression given in most instances is that this is a way to encourage buyer agents to bring their clients to that particular house because the buyer agent will make more money on the deal. When I have a client who signs a Buyers Rep Agreement, my compenstation is spelled out in the agreement as a percent of the purchase price. I basically agree to provide all the services of a buyers agent for that fee, no more and no less. I tell my clients that if any bonuses are offerred to the buyers agent by the seller that we will have the negotiated price of the house reduced by the bonus amount or use the bonus offerred to reduce their closing costs accordingly. In my opinion, this accomplishes a couple of things. It makes clear to my client what my compensation is and tends to add trust to the relationship by doing what I believe is what is in the best interests of my client. It removes even the appearance of "steering" my client to the house because of the bonus offerred to the agent. It lowers the amount paid by the buyers either by a lower sales price or lower closing costs. Some people may differ, but I believe that operating this way is in the best interests of my buyer client. I present this here primarily to let sellers know that the buyers agent bonus might not make as much sense as they think it might. Rather than a bonus they may want to consider paying an equivalent amount in buyers closing costs or just reduce the price of the house. I would be interested in any feedback from other realtors who operate this way.
Reply With Quote Quick reply to this message

 
Old 11-22-2007, 01:57 PM
 
Location: Just south of Denver since 1989
11,813 posts, read 34,268,187 times
Reputation: 8930
I agree.

But Listing brokerages market properties to two different subjects. Buyers unrepresented by Buyer's Agents (Bubba's) and to Real Estate Professionals.

Sometimes the house and the location will sell itself to a Bubba - but the typical buyer will need some financial assistance to complete the deal.

Sometimes the property needs the added exposure from the REP community - so to make it more attractive then the other 50 homes like theirs on the market, a bonus is offered to the agent who closes the deal.

I too, work with a BA agreement and anything over the agreed amount of pay is given to the buyer at closing. Without an agreement for pay for services, I could keep whatever I was given.

As a matter of fact, I did an initial interview with a local buyer - who basically told me he wouldn't sign no blasted agency agreement, with me or anyone else. Ok, good luck, have a nice life, here's the door....

His wife emails me about two months ago. I probably don't remember them, but they met with me, and they would like my opinion.... The house they bought with the team members "buyer's specialist" (the team member had the listing) and it had a $5,000 BA bonus...they did not know about until closing when they read the HUD-1. Is that an illegal kickback, since it wasn't disclosed? They would have rather taken the $5,000 off the price...etc.
I emailed her back, "What did your agency agreement say about pay, and how bonuses are handled?"
"We didn't have one," was the reply. "Are you sure?"I asked, "because pay for services would have been spelled out in your agreement."

"Yes, I am sure. We didn't have an agreement saying what the agent would be paid."

"Ok then, the broker would have been free to accept whatever was offered, since you did not place a limit, or a minimum on the pay for services."

"Well what do you think, I can do now?"

"What does you agreement say?"

"Nothing, we didn't have an agreement."


OK then, I bet they paid full price too.

Last edited by 2bindenver; 11-22-2007 at 01:59 PM.. Reason: added color
Reply With Quote Quick reply to this message
 
Old 11-22-2007, 05:13 PM
 
Location: Richmond, VA
2,309 posts, read 2,283,171 times
Reputation: 974
Quote:
Originally Posted by gbone View Post
I have seen many posts in many different threads about realtors being offerred a bonus if they bring a buyer who makes an offer and closes on a house. The impression given in most instances is that this is a way to encourage buyer agents to bring their clients to that particular house because the buyer agent will make more money on the deal. When I have a client who signs a Buyers Rep Agreement, my compenstation is spelled out in the agreement as a percent of the purchase price. I basically agree to provide all the services of a buyers agent for that fee, no more and no less. I tell my clients that if any bonuses are offerred to the buyers agent by the seller that we will have the negotiated price of the house reduced by the bonus amount or use the bonus offerred to reduce their closing costs accordingly. In my opinion, this accomplishes a couple of things. It makes clear to my client what my compensation is and tends to add trust to the relationship by doing what I believe is what is in the best interests of my client. It removes even the appearance of "steering" my client to the house because of the bonus offerred to the agent. It lowers the amount paid by the buyers either by a lower sales price or lower closing costs. Some people may differ, but I believe that operating this way is in the best interests of my buyer client. I present this here primarily to let sellers know that the buyers agent bonus might not make as much sense as they think it might. Rather than a bonus they may want to consider paying an equivalent amount in buyers closing costs or just reduce the price of the house. I would be interested in any feedback from other realtors who operate this way.
We actually thought the buyers realtor would do just this...but NO. He wants the bonus for himself. told my agent he doesn't negotiate commission and she explained this is a BONUS and not commission but he insisted. I am glad to hear you do it the way you do
Reply With Quote Quick reply to this message
 
Old 11-22-2007, 09:14 PM
 
Location: Martinsville, NJ
6,175 posts, read 12,889,122 times
Reputation: 4019
Quote:
Originally Posted by twinmma View Post
We actually thought the buyers realtor would do just this...but NO. He wants the bonus for himself. told my agent he doesn't negotiate commission and she explained this is a BONUS and not commission but he insisted. I am glad to hear you do it the way you do
I know I'm going to get an emotional outburst of negative responses for this, but here goes anyway.
In all fairness, why should he not want it for himself? You, (or your agent) offered a bonus to the AGENT who sells your house, right? So, he wants what was offered. What he dos with it, whether he shares it with his broker or with his client, is really none of your concern, or your agents. Did he do what he had to do to earn the bonus you offered? If no, then don't pay it. If yes, pay him & don't worry what he does with the money. In fact, for all you know, he IS giving his client the money AFTER the closing, so his client can have it to do whatever he wants with it. The question of the agents integrity and how he's looking out for his buyer would have come if your lowest acceptable price ended up being higher than the buyer was willing to pay, by the amount of the bonus or less. Would the agent have sacrificed the bonus to make the deal happen? Maybe. But he doesn'r have to, because he negotiated well enough to get his client the house he wanted fgor a price he was willing to pay, and still keep all the compensation available. Well done, I say.
Reply With Quote Quick reply to this message
 
Old 11-23-2007, 06:10 AM
 
Location: Palm Coast, Fl
2,249 posts, read 8,870,652 times
Reputation: 1009
I agree. If you don't want to pay it or have it an 'issue' then don't offer it to begin with.
It's the seller who is complicating the deal with offering the bonus. You really can't moan and groan about it after you've used it to bring someone in. What you can do is offer the bonus for a full price offer which effectively removes the bonus from negotiations...takes it off the table unless the offer is full price.
Reply With Quote Quick reply to this message
 
Old 11-23-2007, 10:37 AM
 
Location: Just south of Denver since 1989
11,813 posts, read 34,268,187 times
Reputation: 8930
Exclamation Neg rep point for using BUBBA

Hey! I mean no insult. I am just using acronyms. I didn't need an anon negative rep point for that post.
Reply With Quote Quick reply to this message
 
Old 11-23-2007, 11:16 PM
 
Location: Raleigh, NC
12,475 posts, read 32,132,492 times
Reputation: 9450
ANYTIME I show any house to my buyers that has a bonus, I let them know about it immediately!

Whenever I show new construction and the onsite person tells me there is a bonus involved, I immediately squeal out to my buyers..."Oh my goodness...a $2,000 bonus for ME and $4,000 in closing costs for YOU...lets buy this house NOW!!!".

We all get a good laugh and my buyers know that I'm not steering them towards this house. Everything is out in the open and I don't feel like there are any secrets. My buyers appreciate my honesty and have told me so.

Vicki
Reply With Quote Quick reply to this message
 
Old 11-24-2007, 01:32 AM
 
Location: Columbia, SC
10,891 posts, read 21,844,719 times
Reputation: 10485
Quote:
Originally Posted by 2bindenver View Post
Hey! I mean no insult. I am just using acronyms. I didn't need an anon negative rep point for that post.
Don't sweat it. I get them all the time. I figure it means I'm doing something good because my post is noticed. I can't give you one right now, but I'll spread it when I'm allowed again.
Reply With Quote Quick reply to this message
 
Old 11-24-2007, 11:25 AM
 
Location: Crestwood
136 posts, read 593,670 times
Reputation: 47
I am not a fan of the buyers agent bonus even though it means more money for me. I would rather the price be reduced. In the long run you will make it up because you will keep your client for doing that.
Reply With Quote Quick reply to this message
 
Old 11-24-2007, 11:34 AM
 
582 posts, read 2,004,624 times
Reputation: 99
I don't think there is anything wrong with the buyer's agent bonus, especially when it is clarified with the words "with acceptable offer." In twin's situation she had offered the bonus with acceptable offer, then was pushed down to the minimum she could possibly afford to sell her house for and the buyer's agent wouldn't give up the bonus to seal the deal. I understand the agent wanting to keep the bonus, but if it is a choice between holding fast to that bonus and not getting the sale (or buy in this case) or giving up the bonus in order to close the deal and earn your commission, I would imagine most sensible people would do that. If the bonus is $5k and the agent would only make $2k out of the deal then I understand... but twin's problem when he was holding out for $1k and was set to make $5700 out of it. That doesn't make sense...
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Real Estate Professionals
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top