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The answer to this is so unique to each area/market.  We've offered higher BA commissions (this is a sure fired way to get BA's coming back to you when they have buyers but don't know your particular inventory).  We've had properties staged, etc.

We do not have a sure-fire answer (except that lowering the price always sells a property).  With that said, I'd check out what IS selling that is in the same price range as the property you have listed.  Is it a particular sub-division, is it a particular area, is there more competition in that price range (as opposed to features comparables) than previously expected?

 

Around here a bonus to the buyers agent typically says one thing about a property...D-O-G.  I would much rather the seller lower the price.  I feel compelled to disclose to the buyers that there would be a commission bonus, to ensure that I am giving my clients the best representation possible.

Interesting that you should write about raising the commission to at least get a property shown.  I advised a seller to do just that this morning.  She had her property listed for nearly a year with no showings.  She wanted to know what I would do differently.  I told her that I would properly categorize the property and raise the commission to the selling office to get the property shown.

Thank you for all the comments.  A lot of great points were raised here.  It is unique to each home and neighborhood.  There is always a tremendous amount of research I do before I suggest anything.  I have to look out for the sellers best interests.   It the commission is too high it is a dog, or simply overpriced, I agree.  But when there are a lot of great homes at the same price how do you stand out?  And lastly, and good buyers agent has to disclose a bonus,and in my judgement I would give that directly to the buyer without any questions asked.  That is the right thing to do. Also, a bonus belongs first to the broker, the agent will receive with brokers permission.  Now 90% of the time the agent will receive it, but...the reason I am mentioning it, is I know better!  :)   However, since commissions are not set, and cannot be set, we sell at various rates. and receive varying compensations.  So is my buyer going to say if I sell for a low commission?  Tough luck!  An increased commission is not a bonus, but rather the pre-determined compensation the cooperating agent will receive if they bring in a buyer.

A tiny little increase in commission to the buyer's agent (even .25%) has a huge bang for the buck here AND it's a lot cheaper to the seller overall than a price reduction. BUT I start (some) listings out that way so they get multiple offers out the chute.

Each market is different, but I've found it to be a very very good strategy.

The hardest part is in convincing the sellers!!

Yes, not only is each market differnt, but homes, and sellers as well.  Sometimes it is like talking to a rock!  I am referring to a dead market or one that has so much inventory, that no one is even bothering to take the flyers.  No calls about availability...etc...!  We usually arive at this point when the seller's are asking, "What are you doing to sell my home?" When that happens, I offer the seller's the option to withdraw the listing.

I have always been a believer in lowering the price, incentives have always seemed likely to create a conflict. Are you working in your clients best interest when pointing them to a listing with a bonus?

I know we are all ethical but even the appearance of impropriety can be bad.

Thanks Terry.  I must always remember it is the sellers money.

Jim your correct in the fact that a seller competing with a builder in a subdivision is extremely hard to overcome until the builder builds the subdivision out and moves on down the road. Another scenario I imagine is hard to overcome in some parts of the country is where there are subdivision with a lot of short sales and foreclosures.

I have had great success when I have raised the Co-Op.  Sellers tend to be happy with this because, in most instances, raising the Co-Op results in them netting more on the property.  My thinking is that nobody would really notice a 4K price decrease; however, MANY agents notice a 1% Co-Op increase.  If an agent can sell two comparable properties, I think that having a bigger Co-Op will probably lead to my listing getting sold.

"How do you compete?  You are already priced right, no repairs, or staging are needed, but absolutely no traffic in your listing or the neighborhood!"

Before taking any action, what do the neighborhoods have where homes are selling? Perhaps they are all brick and your sub is vinyl. In that case, you would have to make an adjustment to negate the brick ammenity. This could be price, decorating allowance, financing options, taxes paid, etc... This depends upon what is legally allowed in your State.

In the real world, where buyers agents are working for their clients, the commision offer shouldn't matter.

Just my thought

Danny  Problem is builder even 30 K less is not selling, plus 15 K in incentives.

Matt"I have had great success when I have raised the Co-Op." So have I until this time!  LOL!

Gary New homes area, all the same products, this one is loaded also with loads of real quality upgrades, immaculate, no negatives.  As far as the increased commission, the buyers agent ask every-time to confirm commission before showing, so we know it works, and we have successfully used this many times until now!  We've hit a brick wall!

Agree

Thanks Greg

I have a listing in a new Active Adult community which is only 20% built out. One of the two builders is Lennar; they built the home I have listed. If you know their marketing strategy "Everything's Included", that means that all the comparable homes are truly comparable. They have also been featured on CNBC for days about their horrible financial results. They are paying mortgage payments, discounting and throwing in closing costs, etc. We are trying a strategy which basically says that my Seller will meet or beat the Builder's best deal. Finally I got a call from people that took a brochure out of the box on their last visit. We have scheduled a showing for Easter Monday. We have also scheduled an Open House for the day the new Clubhouse opens on April 21st. A custom sign we had printed will be posted near the Sales Center saying - Better than Builder Pricing, Open Today ...

Hope this works. Any thoughts?

I love it!  Great idea!  Very creative!  That should work well!

Frankly put...apples to apples...the best price SELLS!...Similar properties... like in a PUD[planned unit development]are easy to price+ or - for upgrades/location....the best priced property goes to closing first!!!!

In this 100% no money down there is often no equity,  Realty is just setting in that they are going to have to pay the piper!

Let's face it. People want a bargain, the best bargain they can get for their money - Walmart unfortunately is a perfect example. Most do not care that they are receiving a lesser quality item as long as it looks the same and it is cheaper thats all that is important.

I'd go for the price reduction, add in a home warranty for the buyer. Some type of incentive so they feel they are getting something more for nothing.

Good Luck with this one. Have one just like it myself and nothing seems to be working here either. Bobbie 

Bobbie thanks for the comments.  Price reductions and warranties are good, but in this market clean homes, fresh paint etc... are all pluses also.  As for WalMart as long as this market holds up, I hope we do not see..."Watch the falling prices!"  LOL!