Cash Bonuses Gain Popularity
The question for residential real estate brokers is: Should you pay?
(Mountain Lakes, NJ, November 2, 2017) — As the housing market bounces back and competition for agents intensifies, brokers increasingly are paying signing bonuses to lure agents away from rivals.
Brokers from various corners of the country report that recruiting bonuses range from as little as $6,000 to as much as $100,000. Compass and Coldwell Banker often are cited as aggressive payers of cash bonuses, and other brokerages also are dangling cash offers.
The practice has now spread beyond coastal markets. In Cincinnati, Huff Realty Chief Executive Officer Brad DeVries reports that a few of his competitors are wooing agents with "significant checks." In some cases, DeVries says, the amount of the bonuses seems out of line with the production created by the agent.
Ginny Shipe, chief executive officer of the Real Estate Business Institute in Chicago, discourages brokers from paying cash incentives. But, she says, if your rivals start doing so, it’s a good time to take a hard look at your company’s true value proposition. Among the things to consider:
- What tools do you offer to your agents, and what specifically do they get from those tools?
- What training and support do you offer, and how will that translate into production for agents?
- What is your company’s culture?
- What incentives do you provide, including splits, awards, and support?
The full article including a range of opinions on agent signing bonuses appears in the November issue of Real Estate Broker’s Insider.
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