Home sellers enhance buyer incentives
Earle Gibson, a real estate broker in California wine country, says foreclosure trustee sale notices run three full pages a day in the local newspaper.
"In Vallejo right now, there is an inventory of well over 1,000 single-family homes and maybe 10 closings per week, while each week we add probably 20 new listings to the market," she says. "Everybody's hurting. It's like, who's the lucky agent this week?"
Gibson likens her high-priced turf, which includes Napa, Sonoma and Marin counties, to a high noon stare-down between home sellers and prospective buyers, both of whom can afford to wait for the other to blink.
Which is not to say there isn't considerable strategizing going on. But now the power meetings are between listing agents and their anxious sellers on how to flag the attention of agents representing qualified buyers.
"In order for a home to sell once, it has to
sell twice: You have to sell it to the Realtors and then the Realtors
sell it to their buyers," says Kokoszka.
The best way to sell to a Realtor is via an increased commission or a sales bonus.
Gibson confirms that the courting of buyer agents is in full swing. "We're seeing more back to the split of (more favorable) 6 percent commissions, but we're also seeing, in the confidential area of the MLS, bonuses of $5,000 or $10,000 to selling agents, to try to lure them," she says.
Many brokers won't touch agent bonuses for fear of
fraud litigation. Such bonuses also tend to artificially inflate
the value of a property, warping neighborhood comps and creating
a problem for lenders if the mortgage-holder defaults.
But Crawford knows firsthand how strategically nudging the commission split can work to a seller's advantage. He once had a frustrated seller who was willing to drop his asking price $15,000 below what he paid for the house. Crawford suggested instead that he increase the commission 1 percent to 4 percent. The house sold within two weeks, at a considerable savings to the grateful seller.
That said, romancing real estate agents alone won't sell your house.
"Incentives will work in moderation, as a tool, but they're not going to take the place of a right price," says Crawford. "It has to be priced right to start with, then it has to show right. Otherwise, it's not going to sell."
Next up: The way to entice buyers today