Did you know for many many years home buyers had no representation because all Real Estate Agents worked for sellers as “sub-agents”? Realtors showed properties to home buyers and built wonderful relationships with them, but legally they represented the seller because the seller paid them through the listing commission. This was very confusing to home buyers and it eroded trust between buyers and their Realtor.
Finally, in the mid ’90s, the North Carolina Real Estate Commission decided consumers needed better education as to who represented who in order to make a more informed home buying decisions. They made it mandatory for all Realtors to present a Working with Real Estate Agent brochure at first substantial contact to educate the consumer. This was a great change!
Now home buyers are given the opportunity to work exclusively with one Realtor representing them by a formal written commitment. The buyer’s agent is still paid by the seller through the formal listing contact with the listing real estate firm. The listing firm advertises the agreed commission to be paid to a buyer agent through their private data base of homes for sale, (TMLS) Triangle Multiple Listing Service. The buyer agent must disclose the amount they will be paid by the listing firm through a formal written agreement with their buyers. Bottom line is, all monies must be disclosed in writing to all parties and this too was a great change!
Exclusive Buyer Representation and full disclosure in the greater Raleigh area was a much needed industry change. It gives home buyers more peace of mind and builds trust and stronger relationships with their buyer agent by knowing they have full and Exclusive Buyer Representation. The full disclosure also protects the professional image of Realtors that had been damaged by the confusing ways we worked prior to the mid ’90s.
Why Do Sellers Think a Bonus is a Good Idea?
A highly motivated seller is always looking for creative ways to promote their property and draw fast attention to create a sale. Many Triangle area home sellers do not consider the legal, fiduciary relationship between the home buyer and their buyer agent when thinking about advertising and marketing. Many still believe offering a buyer agent bonus will draw positive attention to their property, when it could actually hurt them. Naturally a bonus to the buyer agent seems like a good plan, but it is really a complicated plan that can backfire creating a negative effect.
Why Can a Bonus Backfire?
- Today’s home buyers hire Realtors to represent their best interest exclusively by written contract. A bonus may cause doubt in the minds of buyers.
- Realtors follow a Code of Ethics and know the absence of trust always damages the professional image of our industry. Therefore, we want everything to be disclosed and avoid anything that could potentially damage trust with clients.
- When a Buyer Agent discloses one amount in writing to be paid by the seller and later is told of a larger number, suspicions arise as to whose best interest was at heart, potentially damaging the relationship between client and Realtor permanently. For this reason, instead of seeking out Realtor Bonuses, many Realtors actively avoid them.
- With the change from the mid ’90s, there is also no longer an area on TMLS, Triangle Multiple Listing Service, to advertise a buyer agent bonus to the 8,000 members other than agent remarks which many Realtors do not read. So, the marketing effect along with the negativity it may create between the home buyer and their Realtor may not produce the result a home seller is trying to achieve.
Better Solution for Sellers—Add a Buyer Bonus
Reaching the buyer is the name of the game, so if you really want to increase traffic to your home, instead of a Realtor Bonus try adding a Buyer Bonus. The best way to entice buyers to visit is to ensure your home is “easy to buy” by making the condition move-in ready with updates and fresh neutral paint which is reflected in the photos buyers are viewing. Finally, make sure your home is priced competitively, because no showings or low showings indicate home buyers are rejecting your house at the price currently being offered. Reducing the price is a bonus to the buyer every time.
Lastly, you may offer to cover closing costs for the buyer’s mortgage or you may add other incentives such as all appliances, pool table or riding lawn mowers to add value to the property. However, too much personal property may affect the appraisal so approach personal property with creative caution.
Linda Craft & Team, Realtors
Building and maintaining the trust of our clients has been our goal for over 30 years and we continue to hold ourselves to the highest standards of business. Voted #1 Team in the Triangle, our efforts have fulfilled the dream of owning a home for thousands. Let us help you today.
Schedule an appointment with us today at 919-235-0007 or visit our website for a complete list of our services and more.