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Are realtors allowed to share their commision with a buyer? I friend of mine who is a realtor told me that it is (In Florida) not allowed to do so and there are penalties against a realtor doing so. Is this true? If so why can a realtor split the 6% with a buyers agent and not with a buyer or seller?
What can you do if a realtor has given you a paper to sign so a buyer knows that the realtor will disclose all he knows about the transaction and he doesn't, and that the realtor will act fair and honest, what if he doesn't, and you find out. Is there anything you can do?
If so why can a realtor split the 6% with a buyers agent and not with a buyer or seller?
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The commision split is in the contract between the realtors and they get their check from the title company and it is reported to the IRS as an income. The realtor then has to report it on their taxes and pay income tax on it.
I've known of sellers/buyers that expect the realtor if it is a good friend/relative is involved they almost EXPECT some kind of kickback but they sure don't want to claim it on their taxes as an income. The realtor HAS to report their entire commission as an income even IF they do give a kickback.
FYI: the realtor does NOT get the entire 6% or 3%. The broker gets their portion of that and then the realtor gets theirs.
The commision split is in the contract between the realtors and they get their check from the title company and it is reported to the IRS as an income. The realtor then has to report it on their taxes and pay income tax on it.
I've known of sellers/buyers that expect the realtor if it is a good friend/relative is involved they almost EXPECT some kind of kickback but they sure don't want to claim it on their taxes as an income. The realtor HAS to report their entire commission as an income even IF they do give a kickback.
FYI: the realtor does NOT get the entire 6% or 3%. The broker gets their portion of that and then the realtor gets theirs.
I know they have to share with their broker, but I would like to know what happens if a realtors put in writing that he will share the commision with a non licensed person. Is this allowed and what can you do if not?
Realtors can offer a credit from their commission shown on the closing statement towards the buyer's closing costs (with their broker's approval). It's not the same as sharing the commission, it's more like a concession of a portion of the commission. I usually only do this when it's a repeat customer or a client who sends me lots of other referrals. It can only be given to a party named on the purchase & sale agreement - you can't give part of a commission to an outside party.
Ugh, I answered this on another thread but all but 12 states allow rebates back to buyers or sellers on a transaction. Oregon does not allow them, but there is a list on the DOJ website of what states allow them.
I answered this on another thread as well. It's allowed as long as the cash back or an agreed amount bargained between agent and client is negotiated AFTER the contract has been written. Like Greatday mentioned, this does have to be on the closing statement. You cannot use the payback as an incentive to get the client. I know that here in Missouri, we can't offer anyone an incentive to give or refer us business.
I know they have to share with their broker, but I would like to know what happens if a realtors put in writing that he will share the commision with a non licensed person. Is this allowed and what can you do if not?
Around here, I see brokers offering buyers cash incentives to go through them (through a kickback) so I would assume that it varies by state and that anyone who offers such, has to walk a fine line to stay legal.
Once the Realtor RECEIVES his part of the commission after the closing, he can do anything he wants with it.
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