Daily Archives: October 19, 2011

Broker bonuses: Smart or Dumb?

Gideon Fountain writes:

Last week, broker Cate Keeney sent out a blast e-mail to all 1,007  Greenwich real estate agents offering a $100,000 bonus if you sell her listing at 6 Wyckham Hill Lane by Thanksgiving Day.  This certainly caught everyone’s attention!  Most of the time, bonuses take the form of a one-year car lease, vacation, fur coat, stuff like that.  Sometimes it’s money, but rarely an amount as enticing as $100,000 over and above your regular sales commission.

Selling real estate is the ultimate “eat what you kill” job. Unlike other self-employed professions (medicine, law, accounting, etc.) real estate agents can expect to make nothing from the majority of customer contacts.  They’re busy all week showing their listings and other brokers’ listings, doing research, working on brochures, answering customer calls and e-mails, and at the end of that week it’s entirely possible to have earned…nothing.

So we like to see “bonus to selling broker” on a listing*.  But does it help sell the house?  My brother and I would say to a client contemplating such a move  “Just lower the damned asking price!”, but not always. If the house is already priced “in the ball park” of where it should sell, and it has loads of competition, then maybe a bonus makes sense.

So, if you’ve been wasting your broker’s time for a year or two, and the broker says “In addition to seeing the four houses you asked for, I’m taking you to see 6 Wyckham Hill because there’s a $100,000 bonus”, do your broker a favor and go look. 

6 Wyckham Hill Lane 

*For a broker, a bonus can be life-changing, as it was for me when, in 1997,  I got an accepted offer on a North Street mansion for $4.7M. Listing broker David O’gilvy called me up and said “Oh, by the way, the seller was offering a 10% bonus”.  I got an extra $47,000, and, even after paying big fat taxes, still had enough to put down $35,500 on my first house, a cute little dump on Lake Avenue!

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