my friend is about to sign a contract on a new house....he did all the legwork and just wants to find a buyers agent to sign the contract so he can get a rebate back...he said he's heard of agents giving 80% rebate back to buyers for just signing a name....

yall know any agents that do rebates like this?

6/24/2009 12:24:26 PM

that is technically illegal. of course the agent is allowed to give anyone a present, however, if it seems underhanded (and this would) that agent could lose their license. NC states that no person is allowed to earn a commission or anything similar from a RE transaction unless that person is licensed.

the seller pays the RE commission (most of the time) and the two agents work out who gets what. if the commission is 6% they will usually split if 50-50 or 60-40, so its not even the buyer's agent's to give until after the closing and after the buyer's agent's firm takes their cut.

this is some shady shit.

6/24/2009 12:59:03 PM

the more I think about it, the stupider it sounds...

the selling agent would surely be unhappy at splitting his commission at the last second with a buyer's agent from nowhere and would likely report it to the RE commission. the buyers agent would have a pretty decent shot of losing their license.

I really doubt this kind of thing EVER really happens except in a family situation where your mom or something is your buyer's agent. however, she would have to be represented as your agent from the get-go.

6/24/2009 1:05:02 PM

You can always threaten to bring in a buyer's agent if they don't fork over some of their commission.

6/24/2009 1:26:39 PM

i think you guys are misunderstanding

the buyers agent would be licensed....

the sellers agent has to give the buyers agent 2.4% anyways

the buyers agent splits the 2.4% with the buyer in the form of a rebate

it's all spelled out in the HUD closing so no under the table

it's common for buyers agent to give buyer 50% rebate..google it....

my friend is just saying he's heard of 80% rebates if the buyers agent just signs the contract (less work)

6/24/2009 1:32:53 PM

Yes, this is a common practice. Unfortunately, I do not know of any services that do this.

6/24/2009 1:38:46 PM

I think the mortgage company has to approve it and I think they usually want it to go towards the downpayment/equity. I mean yes that is 1-2% off of the purchase price and that much more instant equity but with the real estate market in most places in fire sale mode, I don't think it's that big of a deal. Also I believe you have to have a buyers agent, unless you are purchasing directly from the owner (FSBO)? So let's say they can't find somebody to sign and give them a rebate, the sellers agent will probably appoint somebody from their own firm to act as the buyers agent (approved by the buyer of course).

[Edited on June 24, 2009 at 1:51 PM. Reason : ]

6/24/2009 1:51:05 PM

I dont think this is all that common. Maybe it happens and is spelled out on the HUD but I would almost guarantee it goes towards closing costs/downpayment and not in the buyer's pocket.

Further, the selling agent isnt giving anyone 2.4% of the commission unless that person participated in the sale of the house. If an agent shows up last minute on the day of closing, that seller's agent is going to negotiate that percentage WAY down to reflect other agent's participation. There are no commissions set in stone and they are negotiated on every end for every individual agreement.

Quote :

"Also I believe you have to have a buyers agent, unless you are purchasing directly from the owner (FSBO)? So let's say they can't find somebody to sign and give them a rebate, the sellers agent will probably appoint somebody from their own firm to act as the buyers agent (approved by the buyer of course)."

No, you dont have to have one. You can buy a house on your own. If the person is selling their house with an agent and you choose to buy the house without one, that person's agent defaults into 'dual agency' and is technically your agent as well, except they work for the seller since that is person who is paying their commission. In my opinion, it never really makes sense to do this because since the seller is paying the commission, you get the services of a professional for free.

[Edited on June 24, 2009 at 2:02 PM. Reason : ..]

6/24/2009 1:58:37 PM

Just have the friend lower the offer by 2%

6/24/2009 2:03:16 PM

that makes more sense. negotiate on the basis that there is not a second agent to pay a commission to. much cleaner.

6/24/2009 2:05:03 PM

Quote :

"dual agency"

That's the term I was thinking of!

Quote :

"Dual Agent You may even permit the listing firm and its agents to represent you and a buyer at the same time. This "dual agency relationship" is most likely to happen if an agent with your listing firm is working as a buyer's agent with someone who wants to purchase your property. If this occurs and you have not already agreed to a dual agency relationship in your listing agreement, your listing agent will ask you to sign a separate agreement or document permitting the agent to act as agent for both you and the buyer. It may be difficult for a dual agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes them the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party. Some firms also offer a form of dual agency called "designated agency" where one agent in the firm represents the seller and another agent represents the buyer. This option (when available) may allow each "designated agent" to more fully represent each party. If you choose the "dual agency" option, remember that since a dual agent's loyalty is divided between parties with competing interests, it is especially important that you have a clear understanding of what your relationship is with the dual agent and what the agent will be doing for you in the transaction. "

http://www.ncrec.state.nc.us/publications-bulletins/WorkingWith.html

Also

Quote :

"DON’T take a larger commission with the understanding that you will “kick back” or “rebate” a portion of the commission to the buyer after closing. ALL COMMISSION REBATES TO BUYERS MUST BE DISCLOSED TO THE LENDER IN THE TRANSACTION AND MUST BE SHOWN ON THE CLOSING STATEMENT. If the lender won’t allow it on the closing statement, the rebate CANNOT be made outside the closing. "

http://www.ncrec.state.nc.us/bulletin/Jan2008Vol38-3/Compensation%20Issues-How%20to%20Handle%20Them.htm

[Edited on June 24, 2009 at 2:58 PM. Reason : also]

6/24/2009 2:51:11 PM

it's fine that the rebate goes towards closing costs/downpayment and not in the buyer's pocket...it's the same to the buyer either way

in my friends case he is buying new construction from a builder so if he doesn't have a buyers agent the sales office keeps the whole commission so why wouldn't it be in his best interest to get a buyers agent to work out the rebate

when i bought my new place i was stupid to not have a buyers agent i even tried to negotiate with the sales office by saying since i don't have a buyers agent, can you reduce the price by 2.4%....and they laughed and said no...

they WELCOME buyers agent and will gladly give the agent 2.4% but they won't give it to me in the form of reducing the house purchase price

pissing me off

6/24/2009 2:56:10 PM

I'm a licensed broker and there is no way on earth I would do such a thing. It compromises a broker's professional position at best and is shady and has toe potential to get people in trouble at worst.

The public always seems to be trying to find ways around paying real estate professionals for what they do.

6/24/2009 3:05:48 PM

And the agents come out in full force to protect their sacred commission while spreading misinformation. Not only is this a relatively common practice (so long as it is on the HUD), but there are companies operating that use buyer rebates as their main marketing push (re: http://www.redfin.com).

If they don't do anything-- as is the case in this transaction-- then there is no reason agents should be paid for it.

[Edited on June 24, 2009 at 4:26 PM. Reason : d]

6/24/2009 4:25:29 PM

Quote :

"If they don't do anything-- as is the case in this transaction-- then there is no reason agents should be paid for it"

right. there is also no reason to compromise the integrity of the profession by 'kicking back' commissions to people who dont carry a professional license.

real estate transactions are done by licensed professionals for a reason.

*also I wasnt spreading misinformation, I just have never seen it done and it clearly toes the line of being legal. the only rebates I have ever known to happen do so because an agent is helping a family member.

[Edited on June 24, 2009 at 4:40 PM. Reason : ..]

6/24/2009 4:39:29 PM

Quote :

"If they don't do anything-- as is the case in this transaction-- then there is no reason agents should be paid for it. "

From the redfin site....

Quote :

"For direct service from our own agents, our minimum fee is $5,500. If the commission we get from the seller is less than $11,000, we still keep $5,500 and refund you the rest. "

So they take $5,500 for doing nothing. On a $200,000 house they would give you $500 for giving them $5,500.... Of course you make more in terms of a rebate for a more expensive house, but so do they.

6/24/2009 4:55:48 PM

Quote :

"'kicking back' commissions to people who dont carry a professional license"

this conversation isn't about giving commissions to non licensed people....if that was the case, anyone would be able to be a buyers agent

Quote :

" Buyer Rebates In addition to any Discounts we can get for our buyers from the builders/sellers, we personally provide a buyer Rebate at closing. This rebate can be a certain percentage of the purchase price or a certain dollar amount as a reward for choosing us as your buyer agents. The exact Rebate amount is disclosed to the buyer, lender and the attorney. It is deducted from our Commission and credited to our buyers and reflected on the HUD-1 Settlement statements. "

seems fairly common

[Edited on June 24, 2009 at 5:06 PM. Reason : k]

6/24/2009 5:03:03 PM

Quote :

"there is also no reason to compromise the integrity of the profession by 'kicking back' commissions to people who dont carry a professional license."

Haha. Keep up the good fight DaBird.

6/24/2009 5:11:03 PM

this article explains it all
http://searchwarp.com/swa31942.htm

and this agent even advertises it on his hummer

http://buyerrebatesrealty.com/

6/24/2009 5:13:28 PM

Quote :

"So they take $5,500 for doing nothing. On a $200,000 house they would give you $500 for giving them $5,500.... Of course you make more in terms of a rebate for a more expensive house, but so do they."

If you look at the markets redfin operates, they are primarily higher priced markets where the average home price is well above $200,000. I wouldn't be surprised if they adjust their commission structure after home prices quit diving.

6/24/2009 5:15:28 PM

Quote :

"Haha. Keep up the good fight DaBird."

I have a license but I only do real estate transactions that I am involved in. Otherwise, I dont have a dog in the fight. Its not my 'job.'

But I do recognize the job that a good agent does and the service they can provide. There are a few people out there who dont need the help understanding the contracts, disclosure laws and the general process, but most people dont and dont care. Licensing prevents the general public from being taken advantage of by the unscrupulous and the commissions are what keeps the good ones in it. Thats why there are laws governing the distribution of RE commissions.

No matter though. Keep hating. You may not ever need an agent but just remember not to bitch when you represent yourself and you screw something up.

6/24/2009 5:33:00 PM

Who said anything about representing themselves?

6/25/2009 10:36:53 AM

Quote :

"they WELCOME buyers agent and will gladly give the agent 2.4% but they won't give it to me in the form of reducing the house purchase price"

A (good) buyer's agent probably would save you more than the 2.4%. I know my guy did and I even joked around with him about the fact that he was working so hard to actually get paid less. He basically said that by getting us the best deal he hoped we'd refer other people to him, further his reputation, etc. So for example if a buyer's agent saved you $10,000 he'd lose $240. He gave you a $10k "rebate" that only costed him $240.

The other good thing about getting a buyer's agent is a listingbook.com account.

6/25/2009 11:44:19 AM

These threads always make me snicker.

6/25/2009 2:10:41 PM