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I think its perfectly fine for you to make such an offer with the following conditions:
*Her broker still gets the 1.5% cut, your agent gets the balance (which is usually 1.5%)
*You will pay your agent $10.00 per hour for all time spent on your search including:
Emails, phone calls, texts, offer submissions, showings, driving time
*You will pay your agent .50 cents for each mile driven on your behalf for showings, dropping off money in earnest checks, or any other reason.
She would probably go for it, because you will wind up paying the agent considerably more than the pre-tax cut she makes of 1.5%
You need to look for a cheaper house. If you are feeling stretched it is not the fault of your hard working agent. Don't forget, it is commonly thought that an agent works harder for clients with less income than for those with more resources. So the less flexibility you have for what you buy, the harder the agent has to work to find it for you and to negotiate for you.
Discount brokers/buyers agents who provide a rebate to buyers is very common now. There is a whole company (Redfin) that works on that model.
My current agent who is great and has been showing us houses since May 2016 and also has helped us bid on 3 houses had not agreed to provide any rebate from the get go. We were fine with. But as we shop more we have realized that in this market our budget is not taking us far and hence we need to stretch. And in this stretching we need every dollar possible. So now we think a rebate from the agent will be helpful for us and add a bit to our stretch budget
I am going to talk to the agent tomorrow to provide a rebate or let us work with someone else. After working with her for 5 months and taking up her time, we feel very guilty about doing this and questioning ourselves.
Is this unethical or wrong?
I'm just curious....what happened with the 3 bids you put on houses? Was it that you were out bid because the offer was too low? I'm not a realtor but just bought a house a few months ago. If you are having a hard time finding a house in your budget then you need to look at other homes that are not that expensive, wait till you can afford more or look in a different town where your money will go further.
Your realtor only gets paid if you buy a house. She is essentially working for free until that happens. Instead of asking her for a rebate (which I would NOT suggest) maybe ask for closing costs with your next offer. That will put more money in your pocket and help with your purchase.
So you don't have enough money to get a house, so you are going to tell your realtor you would like to partake in a rebate program, giving you her money, or you'll fire her? Really? Scum move.
Okay. I've never dealt with Redfin. As a Broker, I don't need authorization to give a rebate.
Spellchecker-corrections loves to rewrite my posts.
You, as a co-oping broker would never be privy to the rebate of the other side of the agreement and their signed agreement. But, both Redfin and Cartus are both very aggressive with their buyers using their in-house lenders. So, what they do (Redfin and Cartus) when buyers show they have a mind of their own and go to their own lender is to send communications insisting that the loan officer acknowledge in writing a rebate is taking place. Kind of a game of gotcha ("your lender won't allow the rebate"). When in fact, rebates are permitted, there are just parameters, but they are allowed. But if any lender here finds them playing this silly game, respond yes, of course the buyer (or seller) can receive it, but you need the written rebate for the file before you can formally give the go ahead.
Anyway, that's how I found out these rebates take weeks to be sent out, and if over $600, to expect a 1099. Rebates (post-closing) cannot be considered in underwriting the loan. Nor do they count towards the max IPC (interested party contribution,l limitations. The kind you are use to, credit at the table, can be considered by the lender when underwriting (broker letter required) and it is counted toward the maximum contributions.
If you give a true rebate and issue a 1099, would that not offset any taxes you would pay?
I am going to talk to the agent tomorrow to provide a rebate or let us work with someone else. After working with her for 5 months and taking up her time, we feel very guilty about doing this and questioning ourselves.
Is this unethical or wrong?
The commission is split between the listing agent and their broker and the selling agent and their broker. She has been working with you for 5 months. Do you really think it is fair to ask her to give up part or the split of the commission she earned working with you for those 5 months?
As you can probably tell from the previous posts, almost everyone agrees that it would be a rude and unethical move. Your agent has spent a great deal of time showing you homes, writing up low-ball offers and now, you've decided that she owes YOU money. WTF?
Do whatever you like -- I suspect you'll head for a discount broker, because, after all, it's all about your pocketbook. Not your character, not your integrity and certainly not your sense of obligation to someone who has done nothing except provide you with a service that you requested and have utilized time and time again.
If you feel guilty, that's your conscience telling you that what you are doing is wrong and a total asshat move. But I'm sure you'll find some way to rationalize it - your kind always does.
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