Should sellers offer buyers’ brokers a bonus?

(flickr photo by 401K)

Every now and then, sellers will offer buyers’ representatives a bonus should they present an acceptable offer.

The idea makes me squirm.

Underlying the strategy of getting brokers to take their customers and clients to see a listing is the supportable idea that some of us are more interested in padding our own bank accounts than in serving the best interests of the folks we represent.

In other words, some brokers don’t always suggest properties to see on the basis of the sole criterion that matters: Apartments and townhouses that seem to match their clients’ requirements.

I suppose the argument could be made that, all potentially desirable properties being equal, brokers might just as well choose those that will increase their income the most — listings that offer the biggest commissions or those that provide bonuses.

But all things never are equal, and the number of appropriate properties these days tends to be abysmally small; there are too many stale, overpriced listings of little merit, especially below the luxury market.

Although bonuses may commonly range between $1,000 and $5,000, there is no real standard.

Ocassionally, some listing brokers for high-end properties have been known to bait the other side with luxury cars or vacations, though, as I have written previously, sometimes the lure is intended just to get the broker to an open house and amounts to nothing more than lunch or a raffle for something like an iPad.

I have to say that any broker who receives — or could receive — much more than a sandwich for making an acceptable offer is ethically bound to disclose the bonus to the buyer.

Lately, despite the state of our housing market, few sellers seem to have resorted to the bonus strategy.  Nor should they.

Why would a seller want to be dealing with a broker who puts his own interests ahead of his or her clients?

Instead, sellers should set an asking price low enough to appeal to every potential buyer.  Or they can offer benefits directly to prospective purchasers, not their brokers, such as buying down mortgage points or offering other concessions that directly have an impact on the buyer.

Tomorrow: Law-breaker

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201
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