If offering Buyers agents 2.7% — the most common payout in the Twin Cities — will motivate them to show a “For Sale” home, will offering 3% incentivize them even more?

Why not offer 4%?!?

Unfortunately for would-be home Sellers, goosing the payout to Buyers agents suffers from diminishing returns — and at some point, likely becomes counterproductive, by suggesting that there’s some grave defect with the home.

In Lieu of Price Reduction

At least in my experience, the subject typically comes up in two situations:  1) prospective home Sellers who want to list unrealistically high; and 2) those same would-be Sellers 30 days — or six months — later, who are resisting an (overdue) price reduction.

“Why cut my asking price by $25k?,” they ask, “when I can simply offer Buyers’ agents a $5k bonus.

Answer:  because an overpriced home with a turbo-charged payout . . . is still an overpriced home.

Too, good Buyers’ agents already show their clients any homes that may be a good fit.

That’s especially true in a continued Seller’s market characterized by too little inventory (at least below $500k or so).

See also, “Realtor Sales Incentives: Best (& Worst) Uses“; “Realtor Sales Incentives:  Too Much of a Good Thing?“; and “The Case for Catering Broker Opens (or not).”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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