In addition to the price being aggressive we have noticed in the Atlanta market that the property also must be in move-in ready condition. Buyers are almost looking for new construction in resales. They want fresh paint, new carpet, updated kitchens and so on.

We have also found that the print media for advertising has fallen from favor. Sellers have to realize that working with an agent who can get them maximum exposure is in their best interest. Unfortunately many agents have a website just to be able to say they have a site. They are clueless with how to utilize it to their sellers advantage.

Well said! And to add to that, any smart agent would pass along those “agent incentives” to their buyer especially if it’s what it would take to make the deal happen. Greed gets you nowhere, playing it smart will not only help you get the deal, but probably a referral!

I would have to agree with you. Even if you lower the price less then market value the buyers are still coming in 30,000 less then asking price. They just want a deal.

Passing along the agent incentives to the buyer would be up to state licensing law wouldn’t it? In NJ we aren’t allowed to do any type of kick backs, gifts have limits, etc,… it’s pretty regulated here. How do they work it in your area?

I do agree with the statement in the original post though, that the incentives should be offered to the buyer as opposed to the agent.

I’m not suggesting that the agent incentives are given to the buyer by the agent. The strategy is that instead of offering to pay the agent more in incentives, the seller takes the same money and uses it to help the buyer with closing costs or interest rate buy downs. That is legal in every state.

I totally agree! A year ago maybe the bonus would’ve helped get the property shown by other agents, but these days all buyers care about is their price.

Greed is what got our economy into the perdicament it is currently in!

“South Jersey” asked about “kickbacks”. In Florida an agent can “give back” money back to the buyer at closing — dollar amount or percentage. For instance if the buyers agent was to receive 5% co-broke, he or she could give back 2% to the buyer as an incentive to help close the deal. Every time I’ve done it, it was applied toward the buyers closing costs so that it wouldn’t affect the sale amount and appraisal values of other homes.
A kickback refers to settlement services and mortgages. Meaning you can not refer your buyer to a mortgage company or title company, and receive a referral fee from that company for doing so.

In addition to price, incentives seem to matter to buyers. Getting a buyer to buy is a challenge in this market. I find that making the deal make sense to a buyer is what it takes. IF a buyer finds a property they want to purchase, closing is where it requires a professional to get the deal dun. Buyers need to feel safe about their purchase and find value in the deal. Interest rates only go so far to the overall affordability of the property. HOA fees and property taxes are often deal breakers that put the monthly carrying cost out of reach. Offering to pay HOA fees for the first year or paying off mello-roos can make the difference in getting the buyer to close the deal. It can often make a bigger difference than a drastic price reduction.

Yeah broker commissions were really during the first part of this correction (slowdown, recession… whatever it is this week) but after all the real estate agents and their families bought new homes the value of co-broke incentives dropped.

Buyers do like incentives though and as you mentioned they like them to pay for closing costs, a down payment of an interest rate buy down. At the end of the day - it’s all about final price and these incentives affect the final price

Getting a willing and “able” buyer is the key in this market. Even with a decline in price and seller’s concessions, it is difficult to place many buyers into a home because they are cash-strapped. Homes valued in the 200k area are just out of reach for many, even though they are perceived as steals. So yes, buyers want a deal, but can they deal with what they get?

I agree 100% with Bob. If the listing agent really wants to get the home sold and has a clue of what is going on. They would have what ever money the seller is willing to give up go to closing costs or at least lower the price. Price is what sells the home in any market!

Of course agents like the incentives, but if they are working in their clients best interest they will help them find the best home for their needs, not a bigger commission.

I think the idea of buyer incentives devalues the agent’s service. In this market an agent’s service is even MORE valuable than the consumer even knows. The agent that actually performs that is.

An agent’s value is in getting the house sold. Period! Incentives and such are often utilized to entice buyers often by agents who NEED to provide such an incentive. Russell Shaw does not offer any incentives and he does quite well.

I submitted this before, it wasn’t spam..but for some reason was deleted. I am a real person.

Getting many sellers to face reality about the value of their home in todays market is a challenge. Some sellers still think it is 2005 and that their house is still worth what it was then. They think everyone else’s home has gone down in value, not theirs.

Getting them to face reality sometimes takes time. They want to price the home high just to see if they get any nibbles from out-of-towners. Then after no action for a few weeks, they start to face reality and drop to a more realistic price. After a couple more weeks and no offers, they new reality sets in.

Meanwhile the smart seller has priced their home aggressively, and has an offer quickly, maybe more than one.

The difference in buyer behavior towards the two houses is like night and day.

Part of our job as listing agents is to educate the seller. But sometimes they won’t listen and the memories of the market of 2000-2005 die slowly.

Where pricing has always been a key issue - they very thought that buyers are preselecting many of their own properties makes the value of professional quality photos and having complete and compelling information provided about the properties more important than ever.

I would also suggest that getting the broadest exposure on the Internet is key to having potential buyers seeing listings. It continues to amaze me when I find that some brokerages do not select to promote their clients properties on the IDX or via Realtor.com and other online marketing platforms.

My husband and I just made an offer on a bank owned home in Mesa, AZ. We are first time home buyers. The house needs no work at all and has only been on the market about three weeks - my realtor suggests that we pay the bank what it wants $229K and then try to get 6% closing costs and 3% toward downpayment. We also qualify for the Ameridream program for FHA. Is that good advice if it is all about the price? It is in a great community, etc., and the house was appraised at 255K last year. Even with this market, the bank got a previous offer. In this market, how does one go about making an offer and knowing it is fair? We just don’t want to get ripped off. Thanks for any advice you can give us.

I answered you here.

“”He has found that newspaper ads, signs and open houses don’t work as well as the Internet.”"

wow.. rewind back to 98, and the only thing worked were newspaper ads, signs and open houses. Boy, how can the above statement be true? I am sure people still check open houses.

He didn’t say that they didn’t work, but that they don’t work as well.

Our investors are looking for 3 things

Can they buy sufficiently below market price to offset future price falls?

Can they add immediate value to the property by refurbishment or redevelopment so they can borrow more?

Can they rent out or sell the said property as quickly as possible to fund the new debtn payments

The title states “Buyer’s Just Want Price” My question is; isn’t price normally a major factor when a buyer does determine whether to purchase a home or not. I don’t think all of a sudden price became the one deciding factor. Of course there are items that buyers factor in whether or not they may purchase a the house. And with the internet is booming; future owners can and will browse websites, photos, and properties online. And I believe that the internet does allow buyers to weed out agents in certain circumstances. With pictures, descriptions, and many fantastic sites out there; the public can easily do their own research and move forward if they so choose.

I do agree that price has everything to do with a buyer’s decision. In current times, it doesn’t matter what a buyer wants, it’s what he can afford. The majority of my buyers come from my website and know the market before they even fly into town to view the homes. Most of the time I am given a list of homes they want to look at and what part of town they want to live in. Buyers do their homework and they do it via the internet. Times have changed and as agents we need to change with the times to be the best we can be for our clients.

It looks as if drive buy calls to the agent on duty are just about a think of the past. It’ll continue to happen some but most buyers are getting their information from someones website and if your website is not on your yard sign you may be losing business.

Robin,

I understand what you mean. Consumers want the services performed. Most people will not use someone if they do a poor job but provide an incentive. People want it done correctly. However, I do believe incentives do have a place in real estate.

Don Drew - I agree with your point about calls to agents on floor duty. That business has dried up as buyers get more sophisticated and web-savvy.

Buyers are also getting less casual about how they find a Realtor and who they choose.

The internet has leveled the playing field in that buyers have easy access to more information, and now expect more from a Realtor than just pulling info off the MLS and having a lock-box key. You have to add value to the process - knowledge, community contacts, communication and quick follow-through are just a few.

Homes are commodities. There are millions of them unsold and more are coming on the market every day due to foreclosures. If you really need to sell, price is the one lever that will move a property. Buyers are waiting for prices to fall even more. US existing home prices are expected to drop in the areas saturated with homes for sale.

Very good points. It’s interesting how in the Las Vegas foreclosure market, I’m encountering many multiple offer situations which my buyers hate. Banks are listing properties at teaser prices in the efforts to get many offers.
I agree with you completely about buyers being super internet savvy. You’re providing them a very good resource with your website. Keep up the good work.