On a daily basis I receive about 100 emails. A good percentage of them are listing advertisement emails from other agents. Most of them don’t even get opened, they go directly from the Inbox to the Deleted Items folder. However, every once in a while something in the Subject line catches my attention. My guess is that this one caught a lot of attention…“WANT A PORCHE? Full price offer by 9/15/07 w/ a 30 day close & drive off in a gorgeous 2006 Carrera S Coupe in Carmon Red Metallic w/stone grey full leather interior.”
I’ve written about Buyer’s Agent incentives before (Bonus to the Buyer’s Agent - Money Well Spent?). And Jay Thompson over at The Phoenix Real Estate Guy has written about the idea of buyer’s and buyer’s agent incentives, Buyers Incentives: Superbowl Tickets and The Sacrosanct 6% Commission - How About 12%.
Jay and I have voiced similar concerns about offering incentives to the Buyer’s Agent. Is it really the right place to spend the money? Is it right for the Buyer’s Agent to accept an incentive as large as what some sellers are offering? (i.e. 2006 Porsche, an additional 9% commission, etc.) How do you approach the situation with your buyers if they are interested in the house with the incentive? As is the case with the scenario that I’ve brought up today, the buyer’s agent’s incentive is only being offered with a full price offer and a 30 day closing. In this situation in order for the buyer’s agent to earn the incentive, he/she could quite possibly be doing a disservice to his/her clients by getting them to offer full price. Especially in this market where it would be very rare for a buyer to pay full price for a home. All legitimate questions and concerns without any definite answers. I would say that each individual situtation deserves it’s own individual solution.
-Steve Nicks
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September 5, 2007 at 9:55 am
Chris Autrey
I would have a hard time even taking my clients to see that listing. Even if I thought that the house was perfect for them, the possibility that I would be seen as doing something self-serving at their expense is enough to make me look the other way.
Besides, even if your clients loved the house enough to make a full-price offer in your down market, how do you think they would feel when you pulled away in a new car?
September 5, 2007 at 10:09 am
Steve Nicks
Chris, I hadn’t thought about being seen as doing something self-serving by just showing them the listing, but I totally agree. And I also agree with you about driving away in a new car. And not just any car, but a $60,000 - $70,000 car. I don’t know that I could ever look them in face again and not feel like I took advantage of the situation.
The problem is that there are probably more agents who would go out of their way to show this home to their clients because of the incentive, than agents like you and I who would either look the other way or at least communicate to our clients that the incentive is being offered and that you would not be accepting the incentive.
September 5, 2007 at 10:11 am
Chris Butterworth
Fair points, Chris. But couldn’t you either A) have your buyers not make a full price offer & still ask for the car? B) have your buyers not make a full price offer & leave the car in the garage? or C) have them buy the home at full price (and give them the car) as a way to buy a new car with a tax-deductible loan? (better check with your CPA first on that one!)
Option C above brings up a valid concern - at some point the IRS may have something to say about extraordinary gifts that come with the purchase..