WASHINGTON -- Top real estate brokers in some of the country's softest markets have a message for homeowners who truly want to sell their properties this fall: Sweeten the pot. Pay higher commissions. Pay bonuses to the agents who bring ready and willing buyers to the table. Help them win $50,000 cash prizes and free weekends in Bermuda.
Here's what's happening:
* On suburban Long Island, where home-sale volume and price declines have been steep for two years, Century 21 agent Joe McQuillen asks -- and routinely gets -- minimum 8 percent to 10 percent commissions from his home sellers. Those fees "are the key to my entire business," he says.
* In the Maryland and Virginia suburbs around Washington, increasing numbers of houses on the local multiple-listing services carry $1,000 to $1,500 bonuses or other incentives. Ray Chappell, the regional five-state head of Prudential Preferred Properties, says he "wouldn't be surprised" if 10 percent to 15 percent of all his firm's sales in the coming soft-market months involve some form of extra financial incentive to selling agents. An aggressive agent with a competing firm, Mount Vernon Realty, offers a free "long weekend in Bermuda" to selling agents who produce buyers for any of her houses.
* In economically hard-hit Connecticut, the state's largest firm, the William Raveis Co., hasn't announced it publicly yet, but is gearing up to shift its standard commission to 7 percent from the current 6 percent. The 1,500-agent firm also has just inaugurated an incentive program where sellers agree to provide a standard bonus of $10,000, payable in cash at closing. The bonus money is then put into a $100,000 pool created from 10 such house sales. The 10 selling agents and 10 listing agents who sold the houses then have their names entered into a drawing. The listing agent whose name is drawn gets $50,000 in cash. The selling agent whose name is drawn also gets $50,000.
The 1-in-10 chance to win $50,000 in cash, says CEO William Raveis, has agents inside and outside his firm motivated about selling houses carrying the bonus.
McQuillen, one of Century 21's highest-selling agents nationally, says fatter commissions -- plus realistic pricing -- are the "only way for serious sellers to go in soft markets."
"I'm very upfront about it [to sellers]," says Mr. McQuillen. "I tell them if you list your house with me, I'm going to sell your house. You can be certain of that if we price it right. But you've got to compensate me for the extras I do in marketing." And you've got to enable me to catch the eye of other agents"
What catches other agents' eyes in the glutted, soft suburban New York market these days, he says, is a larger-than-average number on the MLS (multiple-listing service) in the "selling broker's commission" box.
"When [an agent] knows that he or she is going to make 4 or 5 percent by selling one of my houses vs. 3 percent selling somebody else's, guess where that agent brings the traffic."
Mr. Raveis argues that in the emerging real estate markets in many parts of the country, "unorthodox marketing methods are going to have to replace traditional methods or we simply go out of business."
Asking home sellers to cough up an extra $10,000 in cash at closing or to go along with a standard 7 percent commission certainly sounds unorthodox.
"Sellers are drooling to be part of it," he said. "They are truly motivated to sell, and with a $300,000 average home price [in the southern Connecticut bedroom suburbs of New York City], they say, what's $10,000 if it means I can finally sell, and sell at a reasonable price.' "