Sales Management Tip #102: The Truth About Realtor Bonuses

Posted: February 4, 2019 | Categories: Articles

Rymer Rules:
#1 Priority - Will I Get Paid Quickly and Without a Hassle?

Fighting to collect a commission will kill future showings by the Realtor - and all their friends and colleagues.  

#2 Priority - Is It an Easy Home / Community to Sell?
Realtors want a home and community that sell themselves: “It’s great to make a sale at your first stop.”

#3 Priority – An Onsite Sales Agent I Know & Trust. 
Top onsite agents make Realtors look good, handle the paperwork effortlessly and can close the sale.”

#4. Priority - Higher Commissions and Bonuses.
If you do the top three right, yes, Realtors will respond to higher commissions and bonuses.  


The best answers come from asking the best questions.

If you ask a Realtor what the best way to sell a new home, a typical answer is “offer higher commissions or Realtor bonuses.” OK, that sounds strait forward enough. However, when you ask the question a different way: “Tell me the primary reason you toured your last 5 prospects at the new home they purchased?” The answer is very different.

Using that question in a survey of over 55 top general Realtors showed that higher commission and bonuses ranked as the # 4 reason they decided to show a specific home or community. In fact, higher commissions and bonuses ranked as the primary reason in none of the Realtor’s surveyed! It should come as no surprise that Realtors say one thing but behave another.

Let’s go through the top 4 reasons Realtors said they chose to show new homes and communities (as well as why the choose not to show a builder / community.)    

1.    Getting paid quickly and without a hassle.  Somewhat surprisingly, this is not as straightforward as you might think.  Not getting paid on upgrades or lot premiums may cause a Realtor to boycott a builder in the future (it doesn’t matter that the policy is in writing.) Delaying payment because two different Realtors are making a claim on the same transaction may also put the builder in the “do not sell” category. While the type of examples above are relatively few, Realtors enjoy retelling the stories of how they or someone in their office were shortchanged on a new home commission. Safe to say, the best way to avoid getting listed on the “unfair to Realtors” list is to (1) make your policies consistent with the market and (2) resolve any commission disputes on a timely basis.  

2.     It’s an easy home / community to sell – If you think that a bonus or higher commission solves your “mistake home” – think again. Realtors want to take their customer to the community that shows value and is an easy close. As one Realtor recently said in a focus group “what good is the higher commission if no one wants to buy the home. Showing a problem home make me look bad.” “Better to get 3% on your first stop than show 10 homes with a 5% commission and no sale.” Builders are better to fix the problems (tear out the blue ceramic tile that the canceled buyer ordered) than to rely on a Realtor bonus to fix your problem.

3.    I know and trust the onsite sales agent –  Top Realtors typically have only four or five onsite agents that fit this category. While your sales team may be trying their best with paperwork and providing a clear understanding of the schools and taxes, Realtors don’t have time to waste on an onsite agent’s learning curve.  If your sales team is new, better to have them demonstrate proficiency & competence than to drop off flyers and give cookies at their office visits.

4.    Higher commissions and bonuses – If you are doing a great job on the top three areas listed above higher Realtor commissions and bonuses will do the trick.

The problem is when builders skip the things that Realtors really want and think that using bonuses and spiffs will solve their problems.   

Tags: John Rymer | New Homes Sales Management | Realtors | Rymer Strategies
By John Rymer
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