Shady Realtor Bonuses? 10%!! Free Cruise? Be Aware.

CNBC STREET SIGNS: Homebuyer Beware

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Do you know what your Realtor is making? You should.

Now that the market is slowing down, the incentives offered Buyer agents has
increased. Not across the board, but occasionally. I have recently seen incentives as high as 10% in Miami! And I saw one ad where they are offering a vacation to the Realtor. But the WORST I have seen is “$5,000 bonus for a full price offer.” This should be banned (it might be). The Buyer agent (even though paid by the seller) is supposed to be working for the buyer, not the seller. An agent that takes a $5,000 bribe instead of working to get their client, $5k or $10k is an embarrassment.

Buyers should know exactly what their Realtor is making?

How do you do this? You can start with an “Exclusive Buyer Agency Agreement.” I know what some of you are thinking “Oh, I don’t sign those, I would rather work 4 agents to help me find a home.” Ok, I can see how that initially would sound reasonable. But put yourself in the shoes of the agents. How likely is that agent going to be to help you try and fight for an extra $5,000 or $10,000 off? Human nature would kick in and say “why should I be aggressive on this offer if they might just go elsewhere if this deal doesn’t happen.”

Watch CNBC interview Frank Borges LLosa from on the issue of extra bonuses. This interview pulled from the article “Do Real-Estate Agents Have a Secret Agenda?” in the And in article: “Home Buyer, Beware”.

At we don’t believe in bribes and kickbacks. We agree up front for what we will be paid and anything extra is given back to you at closing. That way you know we aren’t showing you something just because of a bonus.

– Written by Frank Borges LL0SA- Broker/Owner

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  • 14
  • December
  • 2006

3 Responses to “Shady Realtor Bonuses? 10%!! Free Cruise? Be Aware.”

  1. tchaka owen says:

    Frank, being a licensed agent in Florida I get lots of emails offering incredibly high commissions. I recently received a 10% offer as well as a 6% offer with a $40k bonus. If prices were in line with the market, perhaps these incentives wouldn’t be needed.

    Your point about using one agent is important too particularly from the standpoint of performance. If you don’t commit to an agent, the agent is less likely to commit to you. You need someone in your corner when you negotiate something this important.

    Good post!

  2. Christopher says:

    Things like this make me want to just deal with “for sale by owner” properties. If i had any money to buy a place, I mean.

    But is it worth it to risk going the FSBO route even though both buyer and seller probably have no clue what loose ends need to be tied up in terms of the paperwork and whatnot?


  3. Anonymous says:

    Realtor bonuses that are in reality rebated to the buyer under the table are a problem as well – no lender in their right mind is going to do a 100% purchase loan where the buyer/borrower is getting cash back at closing, turning that 100% loan into a, say 125% loan. OK, some lenders actually do this (First Franklin), blissfully ignore a “pre-paid property management fee.” Whatever.

    As someone who sees lots of transactions, I assume any exhorbitant fee is being used as grease. A 10% bonus is what the realtor uses to sell the client what has essentially become this: do you need 10, 25, 50 $100K? Buy a house! Or, the best way to buy that car you want (for cash) – oddly enough – is buy a house!

    Given the recent interest of the feds in these transactions, I would advise anybody watching the infomercials or being sold this line to put 2 and 2 together.

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