Buyers Are Golden

In a market that's changed fairly rapidly to favoring buyers, there's lots of leverage to be had.  And that's probably more true than you know.  Besides the daily begging e-mails from builders offering me all kinds of incentives to bring them buyers, many listings in the Multiple Listing Service offer me bonuses if my buyer buys a particular house.

Now there is certainly nothing unethical in offering such bonuses.  In fact, if they work, the agent has done a good job for their seller.  But I see a potential conflict of interest if the existence of these offers isn't disclosed to the buyers.  While most real estate agents are fine, upstanding human beings, there will surely be some that would push a particular property over another based on the bonus.  And some of these bonuses are substantial.

But if the buyer knows which properties offer which bonuses, they can judge for themselves whether the agent is acting in their best interests.  As in so many areas of real estate, disclosure again seems to be the key.

I go a step further.  Any bonus offered to me for selling a particular property is disclosed to my clients and if they decide on that particular property, we'll write into the contract that the offered bonus goes to the buyers.  While I don't think it's necessary to do this from an ethical standpoint, disclosure would seem to be all that's required. I've told my clients up front what my fee is.  As long as that fee is covered, I see no reason to keep the bonus for myself.

Perhaps the most important thing for buyers to keep in mind, though, is how much the market has changed here locally and how much leverage they now have.  If you're price limit for buying a home is, say $450,000, I'd be looking at properties up to $500,000 if they've been on the market for a lengthy period of time and if the listing gives indications of desperation!  Push the envelope!  While you're goal is always to negotiate your best deal, you haven't had this kind of opportunity to do this in our market in a very long time!  Take advantage of it!