Offering a Gift Card As Buyers/Finders Fee Incentive? (RE agent, feedback, appraisal)

[itsme2]

We are close to putting our house on the market in Florida. It is a high end unique approximately $1.5M house on the water in an island community in a very desireable location.

I have this idea of trying a FSBO for 30 days and if that does not work then place it with a realtor.

I am thinking of producing a nice brochure and offering a 1% buyers incentive in the form of a credit card-gift card or 1% finders fee for anyone who might bring in a buyer. I would mail the brochure to our entire zip code area in hopes that someone in the area might have a friend or someone they know who wants to live in this area with them or to just claim the 1% finders fee.

Would appreciate feedback from anyone who can comment on my strategy either in a postive or negative way.

Thank you.

[SaraSatin]

I don't know about a gift card, but I saw people listing a free 1% interest rate buy down. Basically, for a lot of fixed interest rate loans right now you put your down payment and then you need to "buy down" the interest rate by putting certain percentages more into thehouse to secure a lower rate. If you were going to offer the 1% give the buyer a choice between the gift card or the rate buy down. It's a huge down payment to get a house that big so some people might prefer that.

[PhoenixRT]

Originally Posted by SaraSatin

I don't know about a gift card, but I saw people listing a free 1% interest rate buy down. Basically, for a lot of fixed interest rate loans right now you put your down payment and then you need to "buy down" the interest rate by putting certain percentages more into thehouse to secure a lower rate. If you were going to offer the 1% give the buyer a choice between the gift card or the rate buy down. It's a huge down payment to get a house that big so some people might prefer that.

I think itsme2 is talking about giving the gift card to the person who brings in the buyer....not to the buyer.....so the % rate buy down wouldnt work asa gift for the person who brings in the buyer because they arent getting the new mortgage.

In which case i think cash works best for a finders fee. I know a real estate agent cant give a gift or finders fee to a regular person but your not a real estate agent and your not giving a referral fee so I dont know there is an issue with that at all. So on a million and a half house your talking about giving a $15,000 finders fee to someone who brought in a buyer who closed the sale.
You could bulk mail to your zip code and other surrounding zip codes that are higher end. I dont know how many homes in that price range are actually sold FSBO....for some reason I wouldnt think very many at all. Most buyers are taking advantage of having a buyers agent finding them homes to view right now because the inventory is so high in most places. Maybe you might want to send flyers to high end agents that work your area offering your finders fee...they may want more of a finders fee than 1%. Keep in mind if you send flyers out to agents you will probably get a slew of agents who will try and get you to list with them. Our neighbors had this happen....listed it FSBO and sent flyers with incentives to local agents. She got lots of calls to show the property and when the agents showed up they said their buyers "couldnt make it" but they wanted to chat about listing the home with her. So-be prepared for that headache if you do go that way.

Honestly....in this market i would be amazed if you sold a property in that price range without having an agent rep you....I wouldnt spend too much money in doing the fsbo thing....but i have never done one...just heard horror stories from people who have.

[shellytc]

itsme, if you are testing the waters... they are cold. Your "finders fee" probably won't mean much to a buyers agent. They expect to get paid for representing the buyer and getting the property to closing. they just don't send their buyers to you to get 1% when they can take their buyers down the street and get 3%, bonuses, and more. And then the money you spend on brochures? If you listed it, the agent would do that for you. And marketing? where are you listing the property so the *few* buyers that are out there can find it?

[itsme2]

I was thinking of using my finders fee idea only for a 30 day period and if that fails then I will list it with an agent.

My thoughts are that our neighbors or others in our community may have friends or someone else that they know who might be interested in our property. The $15,000 finders fee should be enough for them to pick up the phone and a make a call(s)? If I got such a flyer offering the $15,000 I would sure be thinking about how I might claim it, wouldn't you?

If I do this my idea is to offer the $15,000 as a finders fee or a buyers incentive paid to the buyer after closing.

During this first 30 days I would also pay the $15K finders fee to any agent who brought me a buyer. In today's market where agents are not able to make many transactions this might be considered as better than nothing?

There really is not much compettion against our house in our community. But the market is additionally stalled due taxes and insurance issues. In spite of this there are sparodic sales here. $1.6M next store 6 months ago $1.8M across the street 8 months ago. Nothing else for sale on our cul de sac now.

[magellan]

You seem to be sending mixed messages here. Does the 1% finders fee go to the "buyer" of the home after closing, or to the person in the general public referring the buyer? If it goes to the referee, don't you think the buyer is going to want $15,000 too once they find out about it? If it goes to the buyer, what is the incentive for the general public to send business your way? Especially if you're in an area where homes aren't selling, and people are trying to find their own buyers.

Maybe it's me, but a 1% mortgage rate buy-down on a $1.5 Million dollar house wouldn't seem to be much of a motivator, especially if you get a lot of cash buyers in your area.

[itsme2]

With my proposition I would pay the 1% ($15K) to either the buyer OR the person referring the buyer, not both.

Thank you.

[mmorris]

Originally Posted by itsme2

We are close to putting our house on the market in Florida. ..........I am thinking of producing a nice brochure and offering a 1% buyers incentive in the form of a credit card-gift card or 1% finders fee for anyone who might bring in a buyer. I would mail the brochure to our entire zip code area in hopes that someone in the area might have a friend or someone they know who wants to live in this area with them or to just claim the 1% finders fee.
Thank you.

itsme2 - I am not a Realtor but I think you have a great idea about the brochure/feature sheet. If you send it to the entire zip code its going to be too broad though. Target your local market, only about 50 - 150 of your closest neighbors, then if nothing pops in a week, send out another 150 to the next closest, etc. Most neighbors will know someone who wants to live there too. BUT if you come out of the chute with an offer like the 1% you run the risk of looking too eager. Beware the bottom feeders with the FSBO!

As a Certified Residential Inspector, I have to mention that you should try to get some help marketing the house. Florida is one of the early adopters for a new inspection, its called a "Certified Move in Ready" and most inspectors will place a sign in the yard stating that its already been inspected and the systems are safe for the next owner. Its no guarantee or warranty, but it is something that the house down the street will not have next to the For Sale sign, and it may entice the buyer to move faster. Its also a way for you to see what systems need repairs around the house or find something that could cause a deal to fall apart. Its basically a Listing Inspection, and they are done all the time.

Good luck and God Bless.

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[GregTraub]

There's also the issue of paying a non-licensed person for "selling" your home. You have to be VERY careful how you and your buyer deal with this person that is getting 1% if they are not licensed here in FL.

Your idea of notifying all your neighbors about your home being available is a great idea though, and is the same concept we realtors use when we send out "just listed" post cards. Most people just throw these away though, so you really have to follow up with calls, or if you konw the neighbors knock on their door and ask if they know anyone that is interested in the neighborhood.

As others have said it's HARD to sell a home in the 1million + range FSBO as most FSBO's don't have the knowlege to successfully market the property....and most people looking to buy a 1.5 million dollar house are not driving around on their own looking for signs to call on.

Where in FL is your home? I have a HUGE network of realtors I have referral relationships with all over the state, should you not be successful in the next 30 days as a FSBO I can find which one would be best for your needs and location, and have them give you a call.

[itsme2]

mmorris,

Interesting idea about the Certified Residential Inspection, generally what would I expect to pay for it in the Tampa Bay area.

Greg,

My concept is to primarily make my neighbors within a half mile of my property aware of it and hope they know someone who might be interested.

I will be talking to 5 realtors I know that work in my market and get each of their CMA's to establish a realistic selling price. I am also thinking of getting a certified appraisal as well, is this a good idea?

Thank you.