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The fact that it ever makes any difference at all is an indictment of the profession, or at least of those buyer's agents for whom it makes a difference and those seller's agents who suggest it as a strategy.
Not when it's the sellers decision to increase the buyer agent commission. It's just additional marketing. Increasing the published BAC is different then a bonus, it is disclosed in the MLS.
Not when it's the sellers decision to increase the buyer agent commission. It's just additional marketing. Increasing the published BAC is different then a bonus, it is disclosed in the MLS.
Anything that influences an agent to direct their buyer to one house over another based on the agent's self-interest and nothing that will benefit the buyer only increases the agent's conflict of interest. It's hard to believe that it is legal. It is clearly unethical, and the fact that it is acceptable to agents on this board is, in fact, and indictment of the industry.
Anything that influences an agent to direct their buyer to one house over another based on the agent's self-interest and nothing that will benefit the buyer only increases the agent's conflict of interest. It's hard to believe that it is legal. It is clearly unethical, and the fact that it is acceptable to agents on this board is, in fact, and indictment of the industry.
I deny I am "indicted."
All a bonus says is that there is money in play in the transaction.
It doesn't say anything about the Listing or Selling Agent. How the agents handle the existence of bonuses says something about them.
The key is DISCLOSURE of the bonus offer. The Buyer needs to know that the bonus is there prior to entering decision-making, and by the end of September that likely will be legally defined in North Carolina as prior to seeing the house.
I've been in compliance for some time now.
I have shown a few houses with bonuses offered, and clearly disclosed such. I don't like surprises, and assume my clients do not either.
I have not closed a home with a bonus, and if I do, the client will know of the bonus offer long before there is a preliminary HUD1 printed for review.
That's all common sense, I think.
If a home in which my client has interest, and there is a bonus offered, are you saying I shouldn't show it to them?
That would indicate egregious lack of common sense, and possible failure to perform as a fiduciary.
My duty to my client is to help them work through distractions like bonuses, and sometimes inane input from third parties.
While this is clearly an effort to be ethical, I don't believe that a simple disclosure of the existence of a bonus is sufficient to offset the influence that the agent may have in herding a buyer toward a bonus house.
There simply is no ethical way to justify a bonus commission. Either you claim that an agent really has no influence over which home a buyer chooses (which is clearly not a justification for the bonus -- what is the bonus for then?), or you claim that the bonus is earned because the agent has tried harder to sell the bonus house, in which case they have violated their fiduciary duty to their principal.
It is such a clear violation of a fiduciary duty, disclosure or no disclosure, and it invites agents to be unethical.
Anything that influences an agent to direct their buyer to one house over another based on the agent's self-interest and nothing that will benefit the buyer only increases the agent's conflict of interest. It's hard to believe that it is legal. It is clearly unethical, and the fact that it is acceptable to agents on this board is, in fact, and indictment of the industry.
How is a $200,000 home with a 2% buyer agent co-op plus a $1,000 bonus worse or more unethical than a 3% buyer agent co-op, or a 3.5% co-op offering?
My buyers are aware of my co-op offering because I have buyer agency agreements which spell out my fee. Since they need to know if they have to pay anything, they know all of what I get.
I just don't see a difference between a lower rate and a bonus vs. a higher offering. Then if you get into the legalities of offering bonuses, it sounds like price fixing and anti-trust issues.
While this is clearly an effort to be ethical, I don't believe that a simple disclosure of the existence of a bonus is sufficient to offset the influence that the agent may have in herding a buyer toward a bonus house.
There simply is no ethical way to justify a bonus commission. Either you claim that an agent really has no influence over which home a buyer chooses (which is clearly not a justification for the bonus -- what is the bonus for then?), or you claim that the bonus is earned because the agent has tried harder to sell the bonus house, in which case they have violated their fiduciary duty to their principal.
It is such a clear violation of a fiduciary duty, disclosure or no disclosure, and it invites agents to be unethical.
I have made neither of those claims you say I have. Neither, ever.
I have never collected a bonus. Never.
If that money is in play on a home that turns up in a search that doesn't include the existence of a bonus as a search parameter, and the client knows about the offered bonus and decides to proceed, and we agree the bonus will go to closing costs, or a reduced price(which just may affect my commission), etc., and the client gets the home they want at a price they want, which of those "claims" would apply?
What "unethical" behavior has threatened the Buyer or anyone else in the transaction?
Agents pushing higher commission/bonus homes is nothing new. Heck, its been pushed on C/D by countless agents in recent history.
It all goes back to caveat emptor "Buyer Beware". Majority of agents will not disclose if a home has a bonus. Its up to you the seller/buyer to do your homework and ask these questions.
Agreed with all, its a waste and causes most agents to feel uncomfortable. I just sold a large deal, and while touring my cleint, one of the list agents, called that we had scheduled, and while I was on speaker phone, blurted out a 25,000 selling bonus, and I thanked him, and when we drove to the property, my cleint was not even interested. He later was impressed, I did not push as my concern was to show him what he liked, and that made the best impression, and he even later told me, after we had bought one he liked. So any good agent, lets the cleint choose, and should not even let the incentive influence any showings.
I just don't see a difference between a lower rate and a bonus vs. a higher offering. Then if you get into the legalities of offering bonuses, it sounds like price fixing and anti-trust issues.
Rationalize all you want, but if there is a financial incentive for an agent to steer their client to one house over another, it is a conflict of interest, and it is a breach of fiduciary duty waiting to happen.
So any good agent, lets the cleint choose, and should not even let the incentive influence any showings.
I don't disagree. But that does not justify bonuses. The sole purpose of offering a bonus is to entice agents to be unethical.
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