A ridiculous promotion by Coldwell Banker to try to extend the tax credit

by on in Selling a Home

The government tax credit for first-time and repeat home buyers officially expired yesterday. Coldwell Banker brokerages across the country are now promoting a 3-month national sales promotion called the “Buyer Bonus Event.” Their website claims that the Buyer Bonus Event “will allow participating Coldwell Banker home sellers to ‘essentially’ extend the tax credit for participating homebuyers.”

Sounds fantastic, doesn’t it? If I list my home for sale with a Coldwell Banker agent, I can magically extend the $8,000 credit to potential buyers. What’s the catch? The catch is that sellers participating in the promotion are giving 3% of the accepted offer price – up to $8,000 – as a credit at closing back to buyers who sign an offer before July 31st. This is not a promotion at all, rather it is a marketing ploy by Coldwell Banker to get their sellers to lower their sales proceeds by $8,000! Coldwell Banker agents offer no contributions in the process, other that advertising that their sellers are willing to concede $8,000 for offers before July 31.

Sellers have always been able to offer concessions to get their home sold, whether in the form of price reductions or contributions towards buyer closing costs. If you are a seller, there is nothing special about this promotion. These are pricing tools that have always been available to you and your agent. No matter who your agent is, if your home is not selling, you should have a conversation about your asking price, incentives you could offer to buyers and any other improvements that could be made to the property to attract more buyers.

I think my favorite part of the promotion is this quote:

“The Government has acted. Now it’s up to us!”

Up to us? I don’t see anything being contributed by your Coldwell Banker agent, other than a promotion to get you to list your home with them and lower your price at the same time. There are a variety of brokerage options available today that WILL save sellers a substantial amount in real estate commissions which they can pass along to buyers to help accelerate the sales process. If you live in the Seattle metropolitan area, listing with a brokerage like findwell will save you 1.5% of the listing commission, while still providing outstanding marketing and customer service to get your home sold. If your home sells for $500,000, you can save $7,500 by using our services, without having to take it out of your own pocket.

  • http://twitter.com/RealEstateCafe Bill Wendel

    So pleased to see someone expose the details behind Coldwell Banker's promo. A homeowner in Cambridge, MA, who listed his home with Coldwell Banker was the first person to tell me about this about a month ago. He was dismayed and asked, “Wonder how many sales contracts will be canceled when discouraged sellers like me decide to create their own homebuyer savings opportunity by dumping their listing agent?”

  • andrea

    At least they are doing something! The concessions have always been up to the seller. Paying for the closing costs is already happening most of the time. Why not take advantage of the additional marketing the company is offering?

  • georgelake

    It's much worse… While the buyer gives up the $8000 “bonus”, CB still collects the $480 commission–something they wouldn't do if you just lowered your price.

    I canceled a listing with CB over this bonehead promotion.

  • Lisa

    “Ridiculous” is not the word for it. As a seller, I am furious that CB has sold me out in this manner. CB has a fiduciary duty to get the best price it can get for its sellers and to utilize best efforts to obtain the price to which the agent and seller have mutually agreed. Instead, CB is actively undermining its clients' and agents' pricing decision by telegraphing to potential buyers that they should attempt to cut a better deal. At the very least, this can be expected to result in disappointed expectations on the part of buyers–a situation hardly conducive to the making of offers. Undoubtedly it will also result in the making of below-market offers propelled by the perception that CB agents are willing to sell out their own clients to make the deal “go.”

    Oh, and go take a look at the CB search tool. When I run a search for “buyer bonus” properties, my home comes up, although I never agreed to offer an $8,000 discount. In fact, it looks like large numbers of nonparticipating properties come up. (Hey, CB, what do you suggest I do when I get sued by an aggrieved buyer who attempts to enforce the deal you offered on my behalf–and without my knowledge or consent?)

    Finally, as others have noted, the very same result could be accomplished–and with a much more advantageous result for the seller–by simply reducing the purchase price. (Think not only additional commissions, but real estate excise taxes.) How can CB possibly advocate structuring a deal in this manner without violating its duty to act in the best interest of its client–the seller?

  • Mpuett

    What a bunch of crybabies.
    I am not at all affiliated with CB, but I applaude them for thinking of some innovative marketing.
    If you don’t want to participate, that is your option. However, are you really going to turn down a ready, willing, and able buyer?
    There is no reason you couldn’t negotiate to have the CB office contribute some of their earnings towards the promotion.