Sweetening Home Sales
By Offering Selling Incentives

These days, a real-estate agent's paycheck doesn't necessarily stop at a cut of the commission.

In markets with a glut of homes for sale -- and there are many of them -- sellers are in fierce competition, all hoping to lure buyers to their properties for a showing. Some of them are making appeals to the pocketbooks of agents working with the buyers. And a buyer might never know about that added bonus.

"With the market shifting from a seller's market to much more of a buyer's market, those incentives are increasing," says Leslie Tyler, vice president of marketing for ZipRealty, a real-estate brokerage based in Emeryville, Calif.

Mentions of cash bonuses, gift cards and other incentives can be emailed to agents, or attached to some listings -- information that real-estate agents can see through professional services but that buyers don't have access to on Web sites.

One builder, for example, recently offered a $5,000 American Express gift card to agents in exchange for a buyer who signed a contract on a Long Island City, N.Y., condominium, says Noah Freedman, a principal with the brokerage firm Bond New York Real Estate.

Keys to a BMW

During the last year, the agent who brought in a buyer for a penthouse in a financial-district building in New York City was promised a fully paid lease on a BMW for a set period of time, he adds.

The main advantage of these incentives: They often catch the eyes of real-estate agents, attracting attention to one property in a sea of available homes, Mr. Freedman says. Whether they have that much influence on a sale, however, isn't as clear. "You can't make someone buy something because you're going to get an AmEx card," Mr. Freedman says.

As for sellers considering the incentive tactic, try to find out what other sellers in the area are offering in terms of bonuses and commission share, Ms. Tyler says. A seller might ask brokers about perks other sellers are offering. However, some might decide it's a better move to appeal to the buyer's pocketbook by agreeing to cover closing costs or cutting the sale price.

Ethics of Choice

Real-estate agents do have a responsibility to show buyers the homes that best suit their needs, says Michael Thiel, associate counsel for the National Association of Realtors. And while perks may be nice, "the obligation to the client is primary."

But in general, agents are not obliged to disclose whether they get bonus compensation on a particular home, Mr. Thiel says.

The incentive could be influential when two similar homes are available -- and one of them offers a perk to the agent, he says. In such a case, an agent might show the property with the incentive first. But if agents get greedy and only show homes that would give them a bigger payday, there's a risk of losing the client.

Given the amount of information available to buyers via the Internet, savvy consumers know what properties are out there -- and decide whether they're being shown all of what fits their needs, says Phyllis Pezenik, vice president of sales and leasing for DJK Residential, a New York real-estate firm.

"If a buyer becomes aware of another property that is similar or better...and the agent has not told them about it, that would tend to make them wary of that broker," she says.

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