Realtor Rebates (Realtors, foreclosures, short sales, value)

[orlandoforsale]

As I understand it, it's legal in Florida, and it's called a 'broker's credit.' It can either go against the price of the home or as cash back. If you're broker is cooperative, it would come out of the full commission and not solely from the agent's split; that is the reduction of commission would be shared equally by broker and agent. When it's done within a non-discount brokerage, such as the one I work with, it's usually with a builder, who oftentimes offer more than a 3% commission. It should appear on the HUD-1 for disclosure to all parties concerned. It should not be an incentive for any party other than the buyer.

[Mike1306]

Originally Posted by orlandoforsale

As I understand it, it's legal in Florida, and it's called a 'broker's credit.' It can either go against the price of the home or as cash back. If you're broker is cooperative, it would come out of the full commission and not solely from the agent's split; that is the reduction of commission would be shared equally by broker and agent. When it's done within a non-discount brokerage, such as the one I work with, it's usually with a builder, who oftentimes offer more than a 3% commission. It should appear on the HUD-1 for disclosure to all parties concerned. It should not be an incentive for any party other than the buyer.

I was pretty sure it could not be cash back, that is why I was asking.

I have been wrong before though.

[palmcoasting]

I've emailed an attorney friend a couple of questions regarding this and the short sale discussion going on in the other forum. I'll let you know what he says. But it's my understanding that as long as it's on the HUD, fully disclosed, it is allowable. It has to come from the brokerage, not the agent. What the agent and the broker do with the split afterwards is their business, but the commission 'belongs' to the broker and only the broker can obligate themselves to a refund or discount.

[cfIfan]

We rebate 25% of our commision after closing/at closing. It depends on the office i believe depending what is agreed. It is on the total commission we recieve before the split, not the purchase price. I believe this is a short term offer, not a long term offer

If a buyer doesnt close, then they dont recieve anything because they havent closed. It is based on the commission. So if the commission is 3% then they would recieve 25% of 3%.

also, this offer is not available to sellers, however, if i take a listing, then depending on the property and what is negotiated, we usually charge 6% and no other fees. If a client cancels their listing for no particular reason we do have charges built into the contract i think its like between $1000-$2000 fee, but typically we dont enforce this.

[AONE]

Those that say the parties of the transaction can receive portions of the commission are correct. If they are not on the transaction and not licensed they can not receive any portion of the commission. Most companies in FL have "administrative" fees that range from $150 - $500. This is a junk fee and does nothing but increase profit to the brokerage firm. ( Not all of us charge those fees) It is always a good policy to ask up front how much it is, as all the others will likely have them.
Oh if you are a dentist, doctor, accountant, florist or any other service provider I'm sure you will also give us a 25% discount on your services.

[Brandon Hoffman]

Originally Posted by Longacre

Is it legal for a buyers agent to offer a rebate for buyers at closing? That rebate woud come out of the buyer agents split. Not looking to give my money away but looking into doing some lending again, double dipping, and offering a rebate if the loan is closed with me.

So who's best interest do you really have in mind? Sounds like to me this a function over fiduciary question or low service vs. full service if you will.

[Rakin]

After working hard to get a buyer into homes, the rising price of gas, insurance, expenses I'm glad my broker doesn't promise a 25% rebate. What a lousy way to earn business.

[cfIfan]

Originally Posted by Rakin

After working hard to get a buyer into homes, the rising price of gas, insurance, expenses I'm glad my broker doesn't promise a 25% rebate. What a lousy way to earn business.

Perhaps i made myself misunderstood. This is a marketing tool which we have available to us and is dependant on many things, such as value of home etc. Even with the hard work i put in with my buyers, if they are purchasing a $400,000 house or above, i am happy to rebate 25%, after all on a 3% commission the total paid to our company would be $12,000 so they would get $3000. After my split with my broker i would recieve just over $7000. I think that is quite adequate even with the prices of gas insurance etc at the moment.

So if a client buys a home for $1,000,000 at a 3% commission you think to offer a 25% rebate and recieve $22500 before your broker split is foolish instead of not offering it and recieving $30,000. Im sorry but i think that is extremely greedy.

Would i offer this to my sellers? absolutly not because the expenses i incur are far greater in terms of marketing etc

I think to not offer this as a marketing tool to my buyers is greedy to be honest

[Brandon Hoffman]

Originally Posted by cfIfan

Perhaps i made myself misunderstood. This is a marketing tool which we have available to us and is dependant on many things, such as value of home etc. Even with the hard work i put in with my buyers, if they are purchasing a $400,000 house or above, i am happy to rebate 25%, after all on a 3% commission the total paid to our company would be $12,000 so they would get $3000. After my split with my broker i would recieve just over $7000. I think that is quite adequate even with the prices of gas insurance etc at the moment.

So if a client buys a home for $1,000,000 at a 3% commission you think to offer a 25% rebate and recieve $22500 before your broker split is foolish instead of not offering it and recieving $30,000. Im sorry but i think that is extremely greedy.

Would i offer this to my sellers? absolutly not because the expenses i incur are far greater in terms of marketing etc

I think to not offer this as a marketing tool to my buyers is greedy to be honest

As a Realtor you need to offer the same service to every client regardless of price. You shouldn't treat a million dollar buyer different than you'd treat a 100k buyer. It's not about greed, it's about treating clients fairly. Why is a million dollar buyer more worthy of a rebate than a 100k buyer? I'd say if anything the 100k buyer probably needs it more than the other.

[cfIfan]

Originally Posted by Brandon Hoffman

As a Realtor you need to offer the same service to every client regardless of price. You shouldn't treat a million dollar buyer different than you'd treat a 100k buyer. It's not about greed, it's about treating clients fairly. Why is a million dollar buyer more worthy of a rebate than a 100k buyer? I'd say if anything the 100k buyer probably needs it more than the other.

I do actually offer the rebate to all my clients, however i was using those examples to the previous poster simply because even in this climate i think the point he was putting across made him look extremely greedy. The only properties i am hesitant to offer the rebate on are foreclosures and short sales where the commission isnt fixed but is subject to change. For example in many cases they will list a commission at 3%subject to lender approval. Well i am committed to getting that property at the lowest possible price for my client, but if the bank comes back and accepts but reduces the commission to 1%, i cant possible offer 25% rebate if it is a low valued home because at that rate i would be lucky to cover my costs. However, i do offer the rebate to clients even if they are buying a $100,000 (not on short/foreclosure) homes because at that price range, they would probably be glad to recieve some cash back, even if it is $1000 or less.

Also, dont confuse offering a rebate with level of service. All of my clients recieve the same high level service, regardless, of rebate, regardless of whether they are buying a $100,000 property or a $2,000,000 property. Im a little confused at how level of service got into the topic! If realtors offer different levels of service to their clients, i would be very concerned and would run a a mile. The point i was trying to make previously is when there are clients purchasing higher value homes, it is just greedy to not even offer a rebate, and in my humble opinion a comment like that person made before enforces why Realtors have such a bad name.