Inducements to Buyers Agents on the Rise?

It is only fair that consumers know about incentives offered to their agents.
This applies particularly to commissions, bonuses, and spiffs offered to buyers agents by builders, or resellers, who offer fat checks to agents to drive traffic to their subdivisions or resale homes.
Nearly 90% of resale listings in Wake County offer me 2.4% of gross contract price as my commission for bringing a successful buyer
Many builders offer 2.5%.
My Buyers Agency agreements all stipulate either a 2.4% or 2.5% Expected Compensation.  I always inform the Buyer client if I am offered a higher pay from “across the table.”
And, I am seeing an increase in higher offers dangled in front of me, if I will bring my client to contract with a builder.
For example, I just received this email from a builder’s representative:

Hi Mike,

“XYZ” is offering 4% commission on all 5 quick move-in homes at “XYZ Development” in “Lovelytown” if they can close by the end of November. That’s BIG money.

As an incentive to attend our luncheon this Thursday 9/14 from 11-2pm we’re offering a $25 gift card for the first 10 agents to arrive. In addition we’re having a drawing for 3-$50 gift cards for touring our quick move-in homes.”

I have a file of many offers like this, from many builders, collected over the last few months.
Transparency in ethics, and current Buyer Agency regulation, require that I disclose these incentives to my buyer clients ASAP, and definitely prior to writing an offer for them.
A buyer should rightfully know, early and clearly, that I stand to reap an increased financial benefit for guiding them, or pressuring them, to purchase any property.

I remember well in 2009, when the market was completely reverse of that we have experienced over the last couple of years, when we bragged about getting contracts in less than 3 months on the market.
And, sellers were desperate.
I saw buyers agent commissions as high as 8%.
You read that right.  “8% of contract price.”
Now, THAT is really BIG money.

I showed a new house in a subdivision where the builder was offering me 4.5%.
And, in follow up, the on-site agent whispered conspiratorially to me, “And, Mike, we want to take care of YOU, too.  I’m sure I can get you more money, if we can get your buyer under contract.”
All I could think was, “EEEwwwww!  So glad my buyer has no interest in these homes.”

I am seeing an uptick in these bonuses and increased commissions, usually in outlying areas outside the Hot Hot Hot Cary, Raleigh real estate market.
Builders want contracts and closings before the end of the fiscal year.  Help those top and bottom lines, and get more houses coming out of the ground.
This happens every year.
I don’t see anything unethical in their actions.  Ethics?  That is my responsibility, and I can choose to be transparent or conceal my motivations from a client.
Transparency, ethics, integrity, clarity.  It’s a package deal.

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