Bonuses: Cash, Gift Cards, Trips, Boats, Weekends in Houses, other Goodies
Be careful when bonuses to buyer reps are offered.
If the seller is paying or providing the bonus, get the bonus out of the seller’s hands so the seller cannot renege after you have advertised the bonus. Best practice, seller and brokerage and law firm sign an escrow agreement that states what the bonus is and how the bonus goes into the law firm’s trust and how the bonus comes out of the law firm’s trust. Otherwise, the seller might refuse to provide the bonus and you have advertised the bonus and the other brokerage might come after you to pay damages for the advertised bonus never provided.
Also, splits and ethics are an issue; especially for trip type bonuses and non-cash type bonuses (e.g. a boat, a car):
• Standard of Practice 16-15
In cooperative transactions Realtors® shall compensate cooperating Realtors® (principal brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of the sales licensees employed by or affiliated with other Realtors® without the prior express knowledge and consent of the cooperating broker.
If you are on the receiving end of bonuses, ensure your independent contract agreements and compensation agreements cover these issues. Also, check with your tax advisor on reporting and paying income tax on bonuses (especially non-cash bonuses paid to you).
Posted by: Byron King on 09/05/19 (This information is only accurate as of 09/05/19. You must contact SCR for updates and changes to this information after 09/05/19 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)