moneykey.jpgI had a condo listed @ El Conquistador CC in Bradenton, Florida that was getting minimal activity at best, but was a great deal. This unit was 1,300ft2, 2 bedroom 2 bath condo, overlooking the treacherous #9 hole of the private Country Club golf course, coupled by breathtaking sunsets. It was located on the top floor of the complex, not a big selling point, but along with the stairs comes a great view from your lanai that actually grabbed a peak of the Gulf (Could’ve easily listed as ”Water View”, but I would’ve been pushing the envelope a bit).. Inside had been upgraded with new carpet, new bathroom fixtures, etc. totaling around $4,000 in “polishing-up” costs. So, I had this unit listed for $189,900 and I was getting very frustrated with the lack of activity so, scratching my head, I came up with a plan.

How about we “Feed the Realtor” and really give the hardworking real estate agent, a super payday incentive! Creating incentive and instilling sense of urgencies is Sales 101, and in a buyers market, you begin to dig deep into your bag of tricks to give your listing a competitive advantage over competing homes. Knowing that the maximum appraised value of my listing was a bit over our asking price (its common in this market to be listed below appraised value), I went to my seller and pitched a plan to offer an unbelievable commission to a buyers agent for bringing us a buyer. I wanted to keep his net gain out of the sale congruent with his goals, so we inflated the price and inflated the commission to a buyers agent for bringing us their buyer. Essentially this created a wash with the inflated price over what he needed out of the sale with the extra commission to the agent. Here’s a layout of the plan:

Currently we were listed @ $189,900 and offering 3% to a buyers agent (He was paying me 3% on the back-end as well for my listing services, but that stayed the same). The maximum appraised value we could get through underwriting with the toughest lenders in town was probably around $210,000 (The post-upgraded look of the unit really made it shine & I knew it would perform well during appraisal time). So we re-listed the unit on MLS for $210,000 and offered 10% TO A BUYER AGENT! WOW! 10%! If an agent brought their before the new plan, they were looking at a $5,697.00 pay day. Now they are staring at a $21,000 pay day! A little raise for their hard work and loyalty for bringing us their most motivated buyers! My phone didn’t stop ringing. I booked 7 showings over the next 4 days and finally received a contract on the 6th day.

Real Estate agents are very hungry right now. The market is tough and buyers are constantly looking for reasons to bail out of a purchase for reasons of “the timings not right”, or “rates are going to get better”.. Hey, when homes were popping on and off the market within 24 hours of being listed, rates took a back seat to taste, and the timing was never better to buy. The market is slow right now (but showing signs of waking up) so when a realtor is working with a motivated buyer, you better believe they are interested in milking that deal for as much as they squeeze out of it. I am no different! I would rather show property at 4% commission paid to me for my buyer than 2.5%. I’m not even sure if its greed.. I think it may be a survival tactic.. Also, the buyer is not getting worse of a deal.. As long as your home will appraise out to a certain contracted price, that is justified as being the market value of the property.

Bottom line.. To create interest in your property, create incentive. This may be in the form of closing costs paid by seller, seller-financing, or free vacation to Las Vegas with purchase! Make your home unique and sell a package.. I chose to be diverse in offering a major payday to a buyers agent. It worked for me! Try it for 30 days (& Don’t get too far from the phone)..

Justin