Posted by: Brian Powers | May 10, 2010

Coldwell Banker’s “Buyer Bonus Sales Event” = Smoke and Mirrors

I was reading an article in the Detroit News over the weekend regarding incentives that some builders and real estate brokers were offering to home buyers in an effort to maintain the momentum in buying activity in the housing market.  One such incentive that really caught my attention was Coldwell Banker’s Buyer Bonus Sales Event. The story, and even Coldwell Banker’s own website, hails the program as one that “extends the benefits of home buyer tax credits” after their recent April 30,2010 expiration.

I was curious as to how Coldwell Banker could offer up to $8000 to home buyers so I dug a little deeper into this program.  Coldwell Banker is not offering any bonus to buyer’s.  They are simply getting the seller of Coldwell Banker listed properties to offer a 3% credit of the purchase price back to the buyer at closing.

So what is Coldwell Banker really offering buyers?  They are offering nothing more than the traditional credits and concessions that buyer’s agents have always negotiated for on behalf of their buyers.  The only difference is they are getting the seller to commit at the time of listing to offer this credit.  And in the process, make the buyers in the marketplace feel like they are getting a special credit by purchasing one of their properties.

There’s nothing wrong with purchasing a property where this incentive is being offered, but there are some precautions a buyer should take.  The first is to ensure the property’s list price hasn’t been inflated 3% to offset this incentive the seller is offering to buyers.  The second, is for buyers not to get wrapped up in a gimmicky incentive like this and lose sight of the real reasons that make a home purchase a good deal for a buyer.

Buyers, make sure you are working with an agent who understands the real needs of you the buyer, and has the market knowledge to find the home that’s right for YOU, and for the best value for you the buyer.  And if you are looking at purchasing a Coldwell Banker listed property, be extra cautious that you aren’t over-paying to make up for this gimmick of a sales incentive.

Choosing a home to purchase for the wrong reasons can cost a buyer thousands and wipe out this 3% credit in an instant. Buyers need to ensure they work with an agent who understands this and has the marketplace knowledge to ensure they are getting the right home at the right price.

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