There was one property my husband and I looked at during our house hunt that we really liked. It wasn’t perfect, but it was close enough — and charming enough — that we were willing to seriously consider it.
Then something happened that, as a consumer, completely turned me off from that home. And it had nothing to do with the property itself.
It was something my agent showed me one day while we were discussing our options. The listing agent for the home in question was hosting an open house and had invited brokers and agents with interested clients.
The listing agent also noted that he would pay a $5,000 bonus to any buyer’s agent who brought a qualified buyer willing to pay full price for the property, with no contingencies or seller concessions, by 5 p.m. the Sunday after the open house.
What’s wrong with that?
Although the home had plenty of small touches that made it an attractive proposition for us — custom baseboards, gorgeous view from the dining room, a kitchen my husband salivated over — there were also some causes for concern. It was a 1960s build that had been fairly extensively remodeled, and my agent noted that permits normally displayed to show that the seller had approved the changes were absent. Nor could he get solid answers from the listing agent.
There was some dampness in spots in the cinder-block basement. The unfinished deck outside looked like it might have started its life hoping to be an extension instead.
Knowing those things, perhaps you can understand that the first thought that entered my head when my agent told me about the offered bonus was: “What’s wrong with the place?”
I understand that the seller might have needed to sell the house for reasons beyond his or her control, and that a bonus would help achieve that end more quickly.
However, given what I’d seen in the house, this bonus offer seemed pretty shady to me. I cannot picture the buyer who would see it and decide to accept it as-is, with no contingencies, unless that buyer were an investor paying cash who saw something I didn’t.
From my consumer’s perspective, this looked like an attempt by the listing agent to entice a buyer’s agent to convince buyers to do something that might not be in their long-term best interest.
And as a buyer myself, that left a terrible taste in my mouth.
When it doesn’t work, and the buyer knows
I realize that not every buyer’s agent is disclosing when he or she is offered or receives a bonus — and my Closing Disclosure only included the items I was responsible for paying; I didn’t see any of the seller’s responsibilities.
So, not every buyer is going to know when this happens. But that doesn’t mean they would be OK with it if they did know.
When the enticement of a buyer’s agent bonus didn’t work, the sellers dropped the price of the property, and my agent asked me if I wanted to consider making an offer.
Absolutely not, I told him.
“But you like the house,” he reminded me. “We might be able to work something out for you.”
I had liked the house. But it didn’t matter.
[Tweet “#Homebuyers want to trust #sellers — hard to do with a buyer’s listing bonus.”]
I wanted to trust the sellers of my property. I wanted to believe that they weren’t trying to screw me over, that my home purchase transaction could be a mutually beneficial thing for everyone involved.
The offer of a buyer’s agent bonus killed whatever trust might have been possible for me in that relationship. Simply the fact that the seller was offering money to “my” agent — the person who had promised to help me out — was enough to make the skeptic in me rear her head.
I liked the house, but I wasn’t in love with it.
And although I probably would have been happy there, I told my agent I’d rather keep looking at houses — in the middle of January in Colorado — than engage in a real estate transaction with someone I don’t have a hope of trusting.
Editor’s note: I live in Colorado. I did close on a home using this agent a few weeks after the incident described — just not the one in the story, for obvious reasons.
Do you offer buyer’s agent bonuses? Have you accepted one? Did the buyers know? Did they care?
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