Opinions on Broker Incentives/Bonuses

[John Newland]

I'm wondering what other investors, sellers, and even agents think of offering a bonus or incentive to a broker/agent when selling a property. I have a few investors who insist on offering incentives ranging from $1000-$5000 to try and drive brokers and their buyer into their properties.

Personally I do not believe in this simply because I feel a property usually sells itself to the buyers. I also think a broker/agent is more willing to look out for their buyer's best interests than their own, even if it means passing up a juicy bonus, just to keep their buyer happy and get referrals and future business from them. In my opinion, the seller is just giving up money and negotiation room unneccessarily; the property would probably have sold on its own merits to the same buyers without a bonus in place. I have listed and sold properties in good time just fine without bonuses, however, some people swear by them. Maybe I have it all wrong.

I'd like to hear what others think about offering selling bonuses and what the experiences have been.

[Joel Owens]

J that's a unique use of a bonus that isn't tied into conditions (bait and switch). In your scenario that kind of thing works.

In a general sense many sellers use inflating the sales price,putting all these conditions in to get the bonus etc. that for the most part are not going to be obtainable.

That's the part that waters down the bonuses offered by builders or regular sellers and experienced brokers and agents know this when they see those offers.

If a sellers or builder is going to offer a bonus they need to stick to their promise or they lose all credibility.Not so important for a one off seller but highly important for an investor that sells multiple time or a builder that has inventory they need to keep selling.

Burned brokers and agents will spread the work quick about builders or investor with bad business practices.