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Trulia Miami, Home Buyer in Miami, FL

How common are bribes (or gifts) in the residential real estate market?

Asked by Trulia Miami, Miami, FL Tue Feb 19, 2013

Help the community by answering this question:


As Annette correctly stated - the real answer depends on the wording you use and who they are being given to.

"Bribing" someone, or "kickbacks", are generally illegal in any industry. An example of an illegal kickback would be a real agent estate referring their clients to a specific mortgage broker, in return for a "cut" in the mortgage broker's commission.

Do real estate agents give "gifts"? If you mean a bottle of wine and a basket of cheese, given to a client after closing - then yes, some do.

Many real estate agents offer after-closing commission "rebates". In this situation, the buyer's agent is paid a cooperative commission for procuring a buyer. Out of this amount, the buyer's agent rebates a portion of it to the buyer. This is typically reflected on the HUD-1 statement. This practice is 100% legal in some states, and illegal in others.

One of the first things you learn as a real estate agent in any facet of a transaction is - Disclosure, disclosure, disclosure. Whether or not a "gift" is legal, depends really on what your definition of a "gift" is, whom it's being given to, and what context it's being given.

Hope that helps!
1 vote Thank Flag Link Thu Feb 21, 2013
Thanks for sharing
Flag Mon Feb 25, 2013
We exist in an industry that lives on this concept.
What we do not know is the context in which this Tulia solicitor is presenting this question.

For many, this refers to the bottle of wine presented to the buyer after the closing.

For others it could be referring to the money a mortgage lender extracts from an agent to pay a portion of the mortgage brokers fees.

Some would refer you to the fees one agent charges another agent when they refer their neighbors neighbor to a Florida agent. They add NOTHING of value, but collect a handsome....???

How about the fee extracted from other agents disguised as MLS fees. They are pure revenue augmentation and add no value to the transaction.

Let's not forget to talk about fees some lead generation companies impose.

Oh, don't let those relocation companies off the hook. They simplely call their fee something legal but does nothing to add value to the transaction. You want to play, they expect a gift.

Then there are those finders who want to wholesale the 'rights' to the property so another can profit.

Now, lets not overlook the banks and how they, the insurance company, the investor can disguise their revenue augmentation through a round robin of "Who'll will bring an additional $10,000?"

In an industry rampant with ethical distortions, a citizen can easily think that something 'smelly' is taking place. The difference between stink and welcoming fragrance depends on which way the revenue flows. It smells wonderful when it call a rebate..right?

Of course, everyone who responded "IT IS ILLEGAL" is absolutely correct. But if you play by the rules....I become legal...magicly.

Until the question is elaborated on more fully to define the direction of the 'gifting' one can not know what context is inferred.

In my early example, how much can you spend on a bottle of wine? Does it depend on the size of the real estate transaction? A bottle of 'Ugly Duck' may not be that well received when that career making estate sale closes. In an industry whose revenue augmentation system depends on extracting 'gifts' from others and adding nothing of value in the process, the 'Code of Ethics' seems a bit lame. But, since those are the rules, and we love those magic it's OK...just don't call a duck and duck.
1 vote Thank Flag Link Thu Feb 21, 2013
I don't think the question should be removed. This makes the topic taboo, when in fact,
there so many dirty little scoundrels out there taking bribes and gifts, way to often.

It is offensive and demeaning to the REAL Ethical Professional Realtors. However,
we have to be more diligent, and vigilant and educate our consumer and we will prevail.

Say NO!!! No bribes, No gift, kickbacks period. Report it all.

0 votes Thank Flag Link Sun Feb 24, 2013
Actually, it was a very good question on a topic that most people would rather not discuss.

0 votes Thank Flag Link Thu Feb 21, 2013
Thanks to Scott, Jim, Annette and Terry! Now this thread is interesting!!!! You comments add valuable thought to the question....and reality!!!

All my best,

NMLS #279125
(951) 795-4547
0 votes Thank Flag Link Thu Feb 21, 2013
I agree with Bill and Deborah, of course it's illegal, but that doesn't mean it's not happening, and as Danielle stated to start us off: it's disgusting. There are bad apples in every bushel. The simplest form (and most distasteful to me) is the agent who won't deal with the clients of other agents because s/he wants both sides of the transaction. Oh, they won't SAY that's what they're doing, but their stall tactics and deception are quite obvious.
On the other hand, there are often misperceptions about dishonest dealings. I heard one property owner accuse an agent of dirty dealing simply because she would not bring a client to his property unless he was willing to compensate the agent for it. That's not dishonest, that's business. Like any other product or service, the agent had something the owner wanted (a buyer) and simply wanted to be paid for it, but that seller thought she was engaging in unethical behavior.
0 votes Thank Flag Link Thu Feb 21, 2013
I think the bulk of your bribes and kickbacks are going on at the HOA level. Board members are taking monies from subcontractors doing work in a subdivision or building. Those subcontractors are 'paying to play'. The are paying enormous amounts of money in bribes to get the jobs, which are all at inflated prices. Each owner of real estate in the HOA winds up paying the tab to line the pockets of the board members that are stealing.

It's RAMPANT in Florida, hard to catch, but there are ways. Never, ever partake in this crime. Lies have no legs and you'll probably get caught.

Scott Miller
Realty Associates
Boca Raton, Miami Beach, FL
0 votes Thank Flag Link Thu Feb 21, 2013
Well I would like to be as optimistic as the previous answers....sorry, but I cannot.

First: Bribes, kick backs, "gifts", etc. are ALL expressly prohibited by RESPA (Real Estate Settlement Protection Act) and any real estate agent, mortgage person, appraiser, escrow, title (anyone associated with a real property transaction) who participates in any form of such is subject to lose of license, fines and/or criminal prosecution...and/or all three.

That said, in a career spanning over 20 years and several states...and years in wholesale lending... I have seen enough fraud to know the real facts...and no amount of denying it will make the truth go away. All I can do is to be diligent to avoid the people who participate in illegal practices and to report any overt actions.

Bear in mind, that some people honestly don't realize they have requested an action that would be illegal under RESPA. In these actions, simply educating the requestor usually results in a quick apology and the requiste "I didn't know" comment.

On the other hand, a couple timesover my career I have been requested to provide renumeration (kick backs) for the referral of a client. I declined and scratched that person off my potential collaboration list.

In conclusion, it is important (IMHO) that we professionals remain diligent and educate consumers thoroughly on what is appropriate in any real estate transaction. The fact is, there are still people out there (in both real estate and mortgage financing) who are not playing by all of the rules. Calling them out and/or exposing them is far more effective that denying that fraud exists at all.

NMLS #279125
(951) 795-4547
0 votes Thank Flag Link Wed Feb 20, 2013
Bribes are prohibit in any industry. Realtors follow a strict rule for ethics. Bribes are big NO.
0 votes Thank Flag Link Wed Feb 20, 2013
Bribes and gifts? About as likely as in any other profession.....
0 votes Thank Flag Link Tue Feb 19, 2013
Bribes? Please remove this question.
0 votes Thank Flag Link Tue Feb 19, 2013
YIKES! We are not permitted to use this practice! is this a trick question?
0 votes Thank Flag Link Tue Feb 19, 2013
I agree as well, question should be removed
0 votes Thank Flag Link Tue Feb 19, 2013
This question should be removed, it is both degrading, illegal activity in any kind, against RESPA rules and not worth answering or discussing.
0 votes Thank Flag Link Tue Feb 19, 2013
Nothing allowed in the residential Real Estate market
0 votes Thank Flag Link Tue Feb 19, 2013
NOTHING OF A VALUE is allowed.
0 votes Thank Flag Link Tue Feb 19, 2013
I would sincerely hope they are not common AT ALL. Any real estate licensee that partakes in this practice should have their license revoked immediately. Disgusting.
0 votes Thank Flag Link Tue Feb 19, 2013
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