Agent Incentives: Good or Bad?

October 7, 2005

As mentioned in my last Market Update article, more sellers and new home builders are offering incentives or "bonuses" over and above stated commissions to agents who bring buyers and write contracts. "What's wrong with this picture?" I ask.

First, it seems to me that my duty to a buyer is to help them find the right home that fits their needs, wants and desires in a price range they can afford. Should I be trying to SELL them something because I can make more money? The answer is "I won't do it"!

Second, sellers or new home builders would attract more buyers by putting that money towards sprucing up the property, lowering the price or reducing closing costs to buyers. My humble opinion.

Finally, all things being equal, if I have a buyer that is interested in equivalent properties and one was offering agent incentives, I would fully disclose that fact and offer to rebate that incentive to the buyer at closing.

The real estate business is a hard business for a high percentage of agents to make a decent living. The question: Are agent incentives good or bad for the buyer and the real estate industry in general?

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