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Many markets across the country are experiencing a large amount of houses on the market for sale.
How can a seller get their house to stand out from the competition when it is right next door and has the same same style, amenities and almost the same price?
How can a seller compete against builders who are offering new houses with thousands of dollars worth of free upgrades?
Some sellers and their agents have chosen to use incentives to buyers and/or their real estate agents to get traffic through their houses and to elicit offers from prospective buyers. I asked three Connect2Agent members if they are seeing more incentives being offered to buyer's agents and if they feel that these incentives are working to get houses sold. Here is their response: Aaron Glassman of Miami Florida
Glassman mentioned three incentives that are used in his market to get traffic through a house:
- An incentive can be offered to the buyer's real estate agent by increasing their commission 1/2-1 percentage point if the agent brings a viable offer in from a perspective homebuyer.
- An monetary incentive, this could be $1,000, can be offered if the buyer's real estate agent brings a buyer that can close on the house by a specific date.
- A Seller can contribute money towards the buyers' closing costs.
I asked Glassman if he felt that incentives offered to a buyer's real
estate agent could be a disservice to a homebuyer because they might be
bypassing houses that didn't have an incentive. He said that a buyer's agent's responsibility is first and foremost to their clients.
Glassman stated that when he takes homebuyers out for the first time to
look at houses, he is touring the communities and neighborhoods with a
homebuyer. In a market with high inventory, he said it is not uncommon to
have several houses in an area that have the same amenities and the
same housing style. The incentive is used as a marketing tool to get
traffic to a house where its competition is very similar in style.
If a homebuyer wanted to safeguard against being steered towards houses
that only offered more compensation to the buyer's real estate agent,
the homebuyer could ask the real estate agent what their compensation is on the houses they view, Glassman said.
Glassman said that he has used incentives in the past. He has not had
any proven success with offering incentives to the buyer's agent. He
believes this is because a homebuyer will purchase a house because they like it, bottom line.
They can envision themselves making the house a home: Maybe the sun
shines in the kitchen from dawn until late afternoon, or the school
district is perfect, or they have fallen in love with the layout.
Val Murphy of Los Angeles California 
Murphy had a recent success story with incentives
offered to a buyer's agent and a buyer. She is the broker of Ladera
Realty Inc. and recently had an agent offer an incentive to both the
buyer's real estate agent and the homebuyer. They were able to get an
offer on the seller's property because of the incentive and are looking
forward to a closing.
Murphy relayed that she had spoken with her real estate agent last week
about the property. She said that it was time to get creative and move
this property. The Sellers had already vacated the house and they were
in a new location with a new house. This meant they were carrying a mortgage on two houses.
The listing agent had already offered to pay the buyer's closing costs
at an open house she held for the property. This would have cost the
Sellers upward of $10,000 as the list price was over $500,000. Also it did not successfully elicit any offers.
Murphy recommended that they offer both the homebuyer and the
buyer's real estate agent two round trip tickets to Paris and a trip to
Hawaii if they made an offer to purchase and closed on the house. Last Thursday, the Seller received an offer, and had another interested party in the wings.
The incentive offered cost the Seller $5,000, and saved them $5,000 from the $10,000 that would have been spent on the closing cost incentive.
Murphy stated that in a market where foreclosures are prevalent and inventory is high you need to get creative to market and sell the houses.
She said each house is different, so incentives should be adjusted to
accomodate the community and the Seller's situation. Murphy believes
their are buyers out there, it is an agent who takes the homebuyers to
the next step that will win the business.
Valli Hale of Dallas Texas
Hale stated that she has tried to use different incentives to bring
more traffic through her Seller's listings. She has offered seller
paid closing costs and buyer's agent incentives.
Hale's experience has
been that the best marketing incentive is to lower the listing price of the house for sale. She said that she might feel this way because she has been able to work in communities and neighborhoods that have stable home sales.
Hale has experienced an increase in inventory in her market. She said that she is finding real estate agents using more networking strategies to attract buyer's real estate agents to their sellers' listings.
Typically real estate agent's tour listings from their office once a
week on what is called a Broker's Open. Haley said now they are
touring bi-weekly. She also has seen Saturday and Sunday open houses,
where usually open houses are just held one day on the weekend.
Another networking technique is the prevalence of happy hours and
lunches held by a seller's real estate agent to draw more interest from
buyers' agents.
Marketing is key to selling your house
One thing is clear, whether you choose to offer an
incentive to the buyer's real estate agent or a prospective homebuyer
your house needs to be known to be seen. If you are in the market to
get your house sold, ask a local Connect2Agent member about their marketing and networking techniques.
Ask them about the use of incentives in your local market and for your house and see what they have to say.
Don't want until after you have listed your house to find out what your real estate agent is going to do to get your house sold.
Posted by Rebecca D. Levinson
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