You Buy the Property, Someone Else Buys Your Agent’s Love
- Oct 18, 2007
With today’s waning home sales, reports of real estate agents and developers offering unusual incentives aren’t uncommon.
But what is unusual is that, in some cases, they’re not offering the incentives to the buyer — but instead to each other.
Take, for example, a recent Wall Street Journal article that featured examples including a builder offering a $5,000 American Express gift card to agents as a thank-you for selling a Long Island City, N.Y., condominium and a fully paid lease on a BMW for an agent who brought in a buyer for a New York City penthouse.
It may seem surprising given the housing market is in such a downturn and money is tight for developers and agents. (Exactly how much was that condo to warrant a $5,000 bonus gift?)
However, as the desperation to sell has risen, along with a need to lure buyers away from do-it-yourself sites like buyowner.com, the incentives are a way of attracting attention to the advantages professional services offer, the Wall Street Journal says.
- Beverly Hills-based real estate brokerage Incentive Real Estate Inc. announced a program just today that gives buyers 250,000 airline miles if they buy a new construction home valued at more than $500,000, according to Reuters.
- Agents in Seattle, according to the city’s local Fox affiliate, have been known to urge homeowners to offer to spring for closing costs pay for home warranties to help sell homes.
The problem: Developers or other real estate agents enticing agents with incentives to a property traps the buyer in a bad situation. It’s one thing if the buyer gets an incentive — but when they’re payin’, isn’t it a conflict of interest if their dealmaker stands to profit over and beyond the typical commission?
Some would say yes — and it could be threatening the industry itself. Tune in tomorrow for more on the incentive debate.