Crazy Agent Promotions....

[iSlutsky]

I have started to see some crazy agent/broker promotions on new developments in Toronto. Just last night I came across an incentive program for a pretty big development with:
- 5% commission; AND,
- trip for 2 to the west coast...

DO you think this a:
- a sign of a desperate developer;
- a great social-media campaign, in an attempt to get agents blogging about it;
- just a nice promotion; or,
- other?

Love to hear your thoughts on this one...

 

[interested]

I don't know which of your options this is.

currently, 4% for r/e agents is not uncommon on larger projects. then, the same agents try and sell to their clients. the clients can't get in early. this is just sad as the end users are forced to pay a middle man for the priviledge to execute a deal even if they require no middle man service. As well 4% is better than the one side of commission on resale. this distorts the r/e agents view and understandably when his livelihood depends on commissions, he will try and sell the product with the best return for him. I am not saying r/e agents are all self serving at the expense of their clients, however it clear the developers are attempting to get the r/e agents to do just that.

that said, 5% and a trip is ludicrous and the end user/investor is the one who pays for this and will be the one to suffer should there be a downward economic turn with house prices dropping.

 

[kondoz]

that sounds crazy! I'll be sure to avoid condo sites like that.

which one was offering all those benefits?

 

[KA1]

Ka1

I have started to see some crazy agent/broker promotions on new developments in Toronto. Just last night I came across an incentive program for a pretty big development with:
- 5% commission; AND,
- trip for 2 to the west coast...

DO you think this a:
- a sign of a desperate developer;
- a great social-media campaign, in an attempt to get agents blogging about it;
- just a nice promotion; or,
- other?

Love to hear your thoughts on this one...

This promotion could be related to high end units.

AURA had a similar promotion for the apartments on Executive floors and penthouse units.

 

[condos1]

There has been lots of weird and crazy RE promos as of late but good agents will never push a client to buy "garbage" to make a buck. There is such a thing called repeat business! Just my two cents.

 

[interested]

There has been lots of weird and crazy RE promos as of late but good agents will never push a client to buy "garbage" to make a buck. There is such a thing called repeat business! Just my two cents.

I was not suggesting that a good agent would do this. Nor did I suggest the client would be pushed to buy garbage. No one is saying the increased commission necessarily implies the product is garbage. It may or may not be. To Ka's point, it may be on the high end properties which would not be gargage. It is however naive to believe that a commission based sales person is not going to look at a 5% opportunity on say a $300000 sale or $15000 vs. 2.5 or 3% for a $300000 sale (or far more on a high end property) if he/she stands to make almost or double the commission. The agent will show the 5% property and hope the buyer likes it vs. the one he makes less commission. If you do not believe that, why do you think the developer is offering the higher commission, because he wants to give away more of his profit? Clearly the developer is trying to elicit exactly the response to have his property shown. I get the idea of repeat business but you are assuming the buyer even knows that the agent is being offered almost double the standard commission. In most cases I would suggest he does not.

 

[KA1]

I was not suggesting that a good agent would do this. Nor did I suggest the client would be pushed to buy garbage. No one is saying the increased commission necessarily implies the product is garbage. It may or may not be. To Ka's point, it may be on the high end properties which would not be gargage. It is however naive to believe that a commission based sales person is not going to look at a 5% opportunity on say a $300000 sale or $15000 vs. 2.5 or 3% for a $300000 sale (or far more on a high end property) if he/she stands to make almost or double the commission. The agent will show the 5% property and hope the buyer likes it vs. the one he makes less commission. If you do not believe that, why do you think the developer is offering the higher commission, because he wants to give away more of his profit? Clearly the developer is trying to elicit exactly the response to have his property shown. I get the idea of repeat business but you are assuming the buyer even knows that the agent is being offered almost double the standard commission. In most cases I would suggest he does not.

You have a very good point, interested.

I am a self employed accountant. I have bought a unit in AURA on the 'Executive' floors. My RE is also my client. I had to tell my RE to keep himself free for my VIP appointment day.

The reason I know of the AURA promotion -- it was a BMW plus commissions --is because my RE forwarded to me various congratulatory emails he had been receiving from AURA -- basically, he, the agent, has achieved success due to his hard work in the past. Now is the time to enjoy the results of his hard work, sell another high end condo and get a BMW.

As I tell my clients -- who care to talk to me -- be careful in buying anything from someone whose living depends upon selling something to you. You might not be getting the best offer/deal. However, one can not solely blame a RE. Our ego and greed has a lot to do with it. Add "tempation" to that, then, it becomes a very deadly and toxic mix. All of us, myself included, have very high opinion of ourselves. We are smarter than others. It is hard, at times very hard, to resist the temptation. Remember, even Adam could not resist the temptation. We, after all, the Sinners. Amen.

 

[interested]

You have a very good point, interested.

I am a self employed accountant. I have bought a unit in AURA on the 'Executive' floors. My RE is also my client. I had to tell my RE to keep himself free for my VIP appointment day.

The reason I know of the AURA promotion -- it was a BMW plus commissions --is because my RE forwarded to me various congratulatory emails he had been receiving from AURA -- basically, he, the agent, has achieved success due to his hard work in the past. Now is the time to enjoy the results of his hard work, sell another high end condo and get a BMW.

As I tell my clients -- who care to talk to me -- be careful in buying anything from someone whose living depends upon selling something to you. You might not be getting the best offer/deal. However, one can not solely blame a RE. Our ego and greed has a lot to do with it. Add "tempation" to that, then, it becomes a very deadly and toxic mix. All of us, myself included, have very high opinion of ourselves. We are smarter than others. It is hard, at times very hard, to resist the temptation. Remember, even Adam could not resist the temptation. We, after all, the Sinners. Amen.

At least the car in this case was not a one sale/one car. Your agent was very upfront with you sending out this email. that said, 5% still is alot of commission. I just feel it is ultimately unfair to the vast majority of people who may want to walk into a new sales office to have to pay that much more. Rather, if one does not use an agent, give the person say 2 or 3% discount instead of giving the agent 5%. I am not saying agents don't add value. I am just saying some people prefer not to use them and i don't think those people should be penalized by having to subsidize the higher price on the property since the developer has to count a certain amount of sales being made at a higher cost to him.

once again, congrat's on the hi floor aura purchase.

 

[dpylyp]

Bonus and disclosure

Bonus or not you should know whats happening as the Buyer
But;
Commissions are not paid till you close
Some offices do not pay out on the advances because of the claw backs
Charge Backs are common when you default on your contract.

Commissions always have an expense at the brokerage (office share)

But some people only see gross numbers.

You need tolook at the added values.

Some Buyers Agents for Condo product have capped closing cost programs that far out weigh the "discounted pricing issues" Thise in particular pay 2% on the final closing ( in late 2011)

Hard to pay your mortgage on that diet of I'll pay you later.

David Pylyp

 

[interested]

Bonus or not you should know whats happening as the Buyer
Some Buyers Agents for Condo product have capped closing cost programs that far out weigh the "discounted pricing issues" Thise in particular pay 2% on the final closing ( in late 2011)

Hard to pay your mortgage on that diet of I'll pay you later.

David Pylyp

Maybe so. My point was simply that interjecting a middle man before even allowing the public in has made for a further layer to add to the price. Some agents may well earn their commission I am not disputing this. Others are being used simply to get into the door and that is fundamentally wrong. I appreciate you are an agent and therefore have a vested interest. I am equally sure if real estate agents had to hire "car agents" to buy a car and pay 3% (or as the discussion here was talking about 5% as a "crazy commission") they would be complaining equally loudly. I think one has to be fair and look at this objectively, which I appreciate may be impossible to do when your livelihood depends on it, which was exactly the point I was trying to make on previous posts. The developers do this distinctly because they believe it works.