Believe it or not, they are out there: Real Estate agents that are willing to rebate a portion of their commission in exchange for your business. I am one of those agents.
For those of you that don’t know, a real estate agent’s commission is paid for by the seller of a property. Their commission is usually 3 per cent of the final sales price of the home. Let’s say a real estate agent represents you on the purchase of a $200,000.00 home. Their gross commission is $6000.00 based on a 3% commission payment.
Why would one agent choose to rebate while another will not? I don’t have the answer to that, but the reason may be that most agents don’t because they have overhead to pay such as broker commission splits, franchise fees or other fees that are due when they sell a house.
Independent brokers like me do not have the overhead that large franchise offices have or other large brokerages may have. Being an independent broker, I do not have to split my commission with a sponsoring broker, nor do I have to pay franchise or marketing fees. I choose to pay that amount directly back to my client at closing.
There are some agents that are part of larger brokerages that do rebate as well. In this case, the broker is probably splitting the rebate with the agent. If you do a search in your city for agents that rebate commissions, I know you will find several in your area.
The question remains, however, does one sacrifice service in exchange for a rebate? Will it take longer to sell a house? The short answer is no. I read a blog on line while researching for this article that implied that an agent that rebates their commission will not work as hard to sell your home or negotiate a better price for a home you wish to purchase. While that may be true in some rare occasions, I know that the agent still has a fiduciary responsibility to you, the client. This cannot be compromised for the sake of a rebate. An agent knows that doing so can also compromise their career. So you must trust, that whether the agent represents you as a listing agent or as a buyer’s agent, their responsibility is to work for you and always protect your interest regardless of whether they pay a rebate or not. They will work just as hard as an agent that does not offer a rebate to sell your property as they will to help you purchase a property.
In today’s economy with lenders requiring more of a down payment, it may be worth using an agent that does rebate a portion of their commission. Rebates can range from one to two per cent of the final sales price of the home. Rebates are paid at closing and can be used towards closing costs or you may receive a check for the rebate. Most rebates have stipulations, so you must check with each individual agent for their rules, but in most cases, the rules are simple. In all cases, you must notify your lender of the rebate if you are financing your home.
While it may sound too good to be true, it isn’t. This is the closest thing to free money you will receive in a real estate transaction. So when looking for an agent, do not hesitate to interview an agent that provides rebates! For more information on my rebate program in San Antonio, visit me at www.rjtre.com.