RISMEDIA, Feb. 1, 2008-(MCT)-”Sell my house, and I’ll give you a bonus on top of your commission.” That’s the message some home sellers are sending to buyers’ real estate agents. They hope offering an extra $3,000, $5,000 or more will stir up interest in their properties and motivate more real estate agents to swing by with potential buyers.
However, several agents interviewed recently said they doubt bonuses really help. They urge a cut in the asking price instead.
“The best way to sell real estate is to price it competitively,” said Jeana Cowie of RE/MAX Limited in Oradell, N.J.
With a bonus, “an agent gets more incentive to show the house, but a good agent shows the buyer houses that are right for the buyer, not for the agent,” said Ivana Crecco of Camelot Realty in Hackensack.
That’s not just being a good agent-it’s being an ethical agent. The National Association of Realtors’ code of ethics requires members to put their clients’ interests ahead of their own, whether they are working for the buyer or the seller.
“It would be unethical for an agent to not show a client a property they thought was more suitable to the client’s needs and desires, in favor of showing them a property that offered a bonus,” said Michael Thiel, associate counsel of the NAR. But he said accepting a bonus is not in itself considered unethical.
In any event, he said, home shoppers usually know about all the properties in their price range and favorite towns, because they usually start their home search on the Internet.
“Agents are not going to be able to steer somebody away from a property simply on the basis of a bonus that might be offered in connection with the sale (of another property),” Thiel said. “I think the offer of a bonus is really more of an effort to make sure the property comes to the attention of agents.”
Weichert agent Liz Roditi said an agent would be foolish to push an unsuitable house on a buyer to get a bonus, because it is more important to have a happy client who will recommend the agent to others.
“If you’re a smart Realtor, you’re going to sell a home to a client that makes financial sense for them,” said Roditi, who works in Weichert’s Tenafly, N.J., office. “You’re doing it because you want your business to grow and you want referrals.”
Though bonuses leave many agents lukewarm, several said commissions are trending upward. Commissions, which are negotiable, are typically split between the seller’s listing agent and the agent who brings in the buyer. During the boom market that ended in 2005, discounts off the traditional 6% commissions were common, and many agents charged 5% or less.
But now, many listing agents are asking for higher commissions to compensate them for their extra costs.
“We know it’s going to cost more to advertise it, and it will take more time to sell it,” Cowie said. In addition, buyers are demanding that their agents show them more properties, because the larger inventory of homes on the market lets buyers be choosier. As a result, Cowie said, those agents should also get more compensation.
Camelot has kept commissions low in most cases-4%.
“But if somebody wants to overprice a house, and I know it’s going to take me more time and money to advertise it,” Crecco said, “I have to go with a higher commission-5 percent.”
© 2008, North Jersey Media Group Inc.
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