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Is an agent rebating part of his commission back to a buyer (or seller) even legal? I realize that state laws may vary. I don't mean negotiating a lower commission going into the contract but a giveback after sale.
Is an agent rebating part of his commission back to a buyer (or seller) even legal? I realize that state laws may vary. I don't mean negotiating a lower commission going into the contract but a giveback after sale.
Yes it is legal in many states.
I am surprised that banks will allow it, as stern as they are on other aspects of disbursements and handling of funds.
It seems like banks would only allow rebates as a reduction of principle, rather than a reduction of borrower equity in the property.
Is an agent rebating part of his commission back to a buyer (or seller) even legal? I realize that state laws may vary. I don't mean negotiating a lower commission going into the contract but a giveback after sale.
It isn't in Oregon and there are only 11 states that don't allow it.
Don't know why we are discussing a scenario that OP says happened when they've not been here in 5 days to discuss.
Yes agents might have colluded, they may have been best buds or the OP might be 100% misunderstanding of the agreement and terms.
How many times have we all had clients not understood what we've said or even the terms of a contract after you've explained it 3 times ?
There's a lot more to this story and it may be purely a misunderstanding between all parties.
Or he could have gotten screwed.
TPTB is a common acronym for The Powers That Be (that would be City-Data moderators, here) and has been for most of my life.
If you have a post removed you won't necessarily be notified and might only know so because you violated the TOS and have been dinged for it (or are getting a word to the wise without a ding). I've had posts removed because a post I've replied to has been removed and my post was thus orphaned.
Lets do the math on the agents take (hours spent from offer to closing):
10hrs = $1000/hr
20 hrs (highly unlikely) = $500/hr
40 hrs (extremely unlikely) = $250/hr
Sounds like a sound business decision to me...
Very easy to break it down when you do it like above but the correct way would be to take the gross commissions for the year, deduct all expenses and then divide by the number of hours worked that year. I think you would come up with very different numbers, maybe in the $18-$25 Hr range.
You really don't have one clue what's involved in closing a deal on a house, do you? If you did, you wouldn't say that. The hardest part of the work STARTS when the house is found and the offer is written.
That's pretty funny. I know exactly what is involved in closing a deal. I have closed many for less than a $10,000 commission check that were nightmares but nightmare closings are the exception, thankfully. Maybe it's different in your market. It's not usually a superhuman feat to take a deal from contract to close. Does it get difficult? Sure. Sanity-threatening at times but with all honesty I have to say that the majority of deals are not pyramid-building difficult after the contract is executed for an experienced agent with sufficient gray matter.
I stand by my original comment that the majority of agents would jump at the chance to earn $10,000 for writing an offer and babysitting the contract to closing.
Very easy to break it down when you do it like above but the correct way would be to take the gross commissions for the year, deduct all expenses and then divide by the number of hours worked that year. I think you would come up with very different numbers, maybe in the $18-$25 Hr range.
I agree. It's not like every agent out there is earning $500,000/year. The average agent pulls in about $30K-$40K annually last I checked. Assuming an agent makes $40K/year and assuming this was a M-F, 9-5 job (it's absolutely not as I work far more than that) that would break down to a little less than $14/hour. If you subtract expenses (and agents are self employed so we basically pay for EVERYTHING) the average agent isn't even earning as much as the guy working the counter at McDonalds.
I agree. It's not like every agent out there is earning $500,000/year. The average agent pulls in about $30K-$40K annually last I checked. Assuming an agent makes $40K/year and assuming this was a M-F, 9-5 job (it's absolutely not as I work far more than that) that would break down to a little less than $14/hour. If you subtract expenses (and agents are self employed so we basically pay for EVERYTHING) the average agent isn't even earning as much as the guy working the counter at McDonalds.
The last number I saw for my MLS area was about $15,000/year.
The problem I see with common analysis of average agent earnings is that I am never certain that the results are adjusted for part-timers, "license hangers" who are keeping the license activated without selling, investor agents who only do their own deals, agents who only refer to others, 1st year agents who don't expect to make 6 figures, etc. These can easily influence the results.
And I wonder how GCI for teams with non-licensed members plays in. Does the rainmaker claim all the GCI and tilt the numbers?
But, agreed, the 80/20+/- rule is in effect. And the 80 is not getting rich.
The last number I saw for my MLS area was about $15,000/year.
The problem I see with common analysis of average agent earnings is that I am never certain that the results are adjusted for part-timers, "license hangers" who are keeping the license activated without selling, investor agents who only do their own deals, agents who only refer to others, 1st year agents who don't expect to make 6 figures, etc. These can easily influence the results.
I absolutely despise people who keep their license active and don't use it (in MA you can still collect a referral fee if you have an inactive license FYI) and I equally despise part time agents. With their limited experience and knowledge they're not doing anyone a favor by acting as their agent. I firmly believe, these people strongly contribute to the negative image the public has of our industry.
Most states require continuing education to maintain a real estate license. What better teacher is there than experience? States should begin requiring that an agent be involved in at least on transaction while their license is active (in MA that's two years) in order to renew. The larger problem IMO is the local Realtor boards. Without tons of members, they don't exist. So, they would never use their political lobbyists to garner support for any regulation that would reduce their membership base.
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