Home Buying in Highland Park>Question Details

HomeBuyerinLA, Home Buyer in Los Angeles, CA

If our realtor didn't assist us in finding a property, can we legally ask him to give us a gift after closing?

Asked by HomeBuyerinLA, Los Angeles, CA Sun Aug 26, 2007

For example, can we ask him to give us a rebate/incentive/"kickback" from his earned commission from our purchase, e.g., buy us a refrigerator or washer/dryer, etc.? We hired him after we had initially visited the property, thus, he played no role in helping us find the property.

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A gift is one thing, a kcikback is another. And is it really a gift if you have to ask for it?

Although your Realtor may have not found the property for you, it was his license and his E&O insurance that was on the line as he wrote the purchase agreement, negotiated with the seller, set up all inspections, negotiated any repairs after the inspections with the sellers, reviewed all documents and disclosures before giving them to you to sign, open escrow, coordinated all aspects of escrow, including reviewing the preliminary title report, working with your lender to make sure all funds were there in time for you to close...and overall protecting you throughout the entire process.

A good Realtor shields you from most of what happens behind the scenes during yor transation. If your transaction went smoothly and you closed on time, maybe you could tahnk him with a nice note and a referral.
Web Reference: http://www.cindihagley.com
15 votes Thank Flag Link Sun Aug 26, 2007
The Hagley G…, Real Estate Pro in Pleasanton, CA
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You can ask for anything, as is true in all aspects of life, however your Realtor is not required to give you anything. He/she was paid for a job he/she did for you. It's sort of like saying, "My doctor didn't find my problem, I walked in and knew my leg was broken and he just fixed it, now I'd like a rebate because he didn't diagnose."
10 votes Thank Flag Link Sun Aug 26, 2007
The value of a realtor is not necessarily in finding the property. That is easily done by anyone on the internet.
The value of a realtor is in negotiating a transaction and navigating the rocky path to closing of escrow.

While we do look for properties for our clients, there is a good chance that you may drive by one, see one on the internet, or stumble across one while visting a friend.

Asking for a gift and especially a "kickback" from a commission is questonable and in receiving a portion of a commission in my state is illegal. There are exceptions for that, but not many.
Web Reference: http://www.valleymarket.com
6 votes Thank Flag Link Sun Aug 26, 2007
I work for a company that gives our buyers a rebate of the commission at closing.
But (even) I am offended by this question.
I think Cindi Hagley said everything that needs to be said here. -
6 votes Thank Flag Link Sun Aug 26, 2007
Did your realtor negotiate and represent you legally, did he make sure you were represented to the end of the transaction. This is really where realtors earn their commission. In Ga RESPA allows gifts of no more than $25.
6 votes Thank Flag Link Sun Aug 26, 2007
It's totally up to the realtor if he wants to give you a closing gift. There are limits as to how much an agent can deduct from taxes for closing gifts. I think it's $40 or even less, but it's certainly a lot let less than what a refrigerator or washer/dryer costs. If you wanted to negotiate a reward, I think you should have negotiated it before he wrote up the offer since you knew that he had not found the property for you.
Web Reference: http://www.go2kw.com
6 votes Thank Flag Link Sun Aug 26, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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Ok Guys! Sylvia is right. HomebuyerinLA should be able to ask a question and get an answer. I believe most of us took this question personally instead of looking at it objectively. Cindi's answer is still a thumbs up as it was informative and answered the question. Even our usually objective voice, Ruth, (sorry Ruth) was caught in the snair. We all know that our profession is under appreciated, and that it is mostly because consumers lack knowledge of what we really do! Thanks Sylvia for putting us in right place. I would say to HomebuyerinLa, please don't do this. It would not be right.
Web Reference: http://carriecrowell.com
4 votes Thank Flag Link Sun Aug 26, 2007
O.K. All:

I came home from my open house today and saw I missed all these and that 12 thumbs up (congrats, Cindi)! Some wonderful answers here!

However, I really have to come in and defend Mr. HomeBuyerinLA. here (I am using Mr. and He for conveniences only; one less letter. so go easy on me on that :-) ).

This is a forum for people to write and ask real estate pros questions about real estate related questions. What we do as realtors and how we are compensated are some of the things people don’t quite know and should ask.

I see that Mr. Homebuyer asked a very legitimate question on whether he could ' legally' ask for a gift after closing. He does not understand how we work, and how we make our living, so he asked, and we should answer accordingly without passing judgment on him. I don’t understand why he received 8 thumbs down and certain answers for this innocent question.

I actually applaud him for asking before going ahead and asking his Realtor about a gift. I think this question showed that he respected us, the forum, and that he did not want to do things inappropriate. We should give him credit for doing so!

So, thank you, Mr. Homebuyer for going on Trulia and ask the question. Please look at some of the great answers below about what’s appropriate and reasons behind that, and do the right thing like you have intended to do in the first place!.

Sylvia
4 votes Thank Flag Link Sun Aug 26, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
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All I have to say is I am glad that the LA in the title is referring to Los Angeles instead of Louisiana! I think everyone has had good answers. Cindi's is by far the best hands down, or thumbs up as the case may be. Finding the right house for the buyer and the right buyer for a listing is really like foreplay. It’s just the beginning, and it is the lighter side of the transaction. It’s after the foreplay that you get down to the real business at hand.
Web Reference: http://carriecrowell.com
4 votes Thank Flag Link Sun Aug 26, 2007
This is what you do

You go to Best Buy, Sears where ever you can find the best selection.

Pick out a Refrigerator. A real nice one it is important to have a good fridge.

Then find a salesmen, one who knows the product well.

Make sure he tells you everything you need to know.

After you have used up his time and have all your answers go to the website below.

And buy it yourself.
4 votes Thank Flag Link Sun Aug 26, 2007
Mr.P, Other/Just Looking in Arizona
MVP'08
You can always legally ask him to give you something, but he can always legally say no. There is no obligation on his part. It is not necessary that he helped you find the property to be entitled to his FULL commission. That said, many agents, especially those who want repeat business, will give their clients a nice closing or "housewarming" gift. You did not say how much the purchase price of your home was ... If it was very expensive, your agent might give you a bigger gift -- but as large as a washer and dryer?-- he would have to be very grateful for the sale.
4 votes Thank Flag Link Sun Aug 26, 2007
Home Buyer in LA -

No lawyers have answered you about the legality of asking.

Agents and one consumer have answered you that it is rude and improper. It is indecent for you to ask him for a gift. He will be insulted by your request for a kickback after the closing and disgusted with you. If you have any self respect you will not ask him. You should ask yourself if you are an ethical person or an ethically challenged person.

I suggest you look up the aphorism "Do unto others as you would have others do unto you." It is the real golden rule. The saying "He who has the gold, rules" is a counterfeit. of the golden rule.

Home Buyer in LA - How would you feel if your boss decided to stick his hand in your pocket or purse next payday and pull out a few benjies?
3 votes Thank Flag Link Sun Aug 26, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
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I believe everyone here answering is a licensed real estate agent except me. The comment I have to agree with most is from Jodi, "I work for a company that gives our buyers a rebate of the commission at closing.
But (even) I am offended by this question. I think Cindi Hagley said everything that needs to be said here."

The one I disagree with is Patrick. You are stooping to his level and you might want to delete your answer and maintain your professionalism (although I did go to the web site and was amused).

I just asked on a different post why Cindi had been given a thumbs down and am curious why Ute got 3 on her first answer. Is it because she didn't give the "I'm not an accountant" disclaimer? And in all of the posts I have read, I don't recall anyone receiving as many thumbs up as Cindi did. Congratulations Cindi!!!

And Rebecca, your analogy is great! I bet if the people who answered before you log back on, you will have as many thumbs up as Cindi.

Sincerely,
an offended Buyer who has used a Rebate company to purchase a home,
Ruth
Web Reference: http://www.oak-park-il.com
3 votes Thank Flag Link Sun Aug 26, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
It looks like you have hit a hot button here. I personally do not have a problem with a buyer who needs a bit of help, but I'd like to know ahead of time that I'll be asked to contribute. I would venture to say that you did not discuss with your agent what would happen if you find the property yourself. It is my experience that there are a lot of buyers who tell you that they are looking for a home that meets certain criteria and is located in a particular area. Then they go out and drive around and they pick a house that meets none of the criteria that they mentioned to their agent and is located in a totally different area. While it is fine for buyers to be proactive (I encourage it), it's not the agent's fault that he/she did not find the house. The flip side is, if an agent does not listen to what a buyer tells him and shows properties that do not match the specified search criteria, you can bet that the buyer will get annoyed by that. It's not always easy to serve buyers. I think all agents want to find the right house and many buyers won't know what the perfect house is until they see it. I want to second everybody who said that the agent's job is to protect the buyer and to work through all the challenges that will come up during the escrow period. Finding the home is only a small detail. Please also remember that it's the seller that pays for the commission and only licensed real estate agents may receive a commission. While there are discount brokers that pay a rebate to their clients (to the extent permitted in their state), it's not common practice. I don't know what line of work you work in, but I doubt that you give a portion of your salary/income to the people who do business with your company. Please remember that you contract with the real estate brokerage and anything you want your agent to pay for will come out of his portion of the commission as the broker will most likely not want to contribute to the gift.
Web Reference: http://www.go2kw.com
3 votes Thank Flag Link Sun Aug 26, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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Many buyers locate the eventual home they wish to purchase on their own. Via the internet, driving around and open houses. This is the smaller part of an agent's job. The true skill is in writing up a smart offer, getting a great price and favorable terms, and protecting you legally throughout the process. Much more is involved here than meets the eye. If this is the service you received, then you should be very satisfied and happy to have your agent earn their full commission.

In my state, as with many, rebates of any type are illegal. As they should be.

What do you do for a living? Do you routinely give a portion of your paycheck to your customers?
3 votes Thank Flag Link Sun Aug 26, 2007
I definitely think anyone should and can be able to ask a question, and he did and it was answered. Pointing out that it was an unusual question is allowed also. I didn't take it personally. The questioner did put the word "kickback" in quotes, which leads me to believe he knew how to use the expression, and that it was not a regular/legal/normal thing.
2 votes Thank Flag Link Sun Aug 26, 2007
Patrick, thanks for the link, it was quite possibly the funniest real estate related joke I have ever seen. Second, Jim Walker, you wrote: " If you have any self respect you will not ask him. You should ask yourself if you are an ethical person or an ethically challenged person.
I suggest you look up the aphorism "Do unto others as you would have others do unto you." It is the real golden rule. The saying "He who has the gold, rules" is a counterfeit. of the golden rule.
Home Buyer in LA - How would you feel if your boss decided to stick his hand in your pocket or purse next payday and pull out a few benjies? "

Bravo to you, but really, isn't that what a many people believe? It's fine to stick your hand in a real estate agent's pocket? It happens all the time. I would love to send Patrick's link to a certain customer I worked with for a year, my most difficult customer ever, a fellow commissioned sales person, who refused to come to see a model home with me for various reasons, then months later drove by, walked in, and bought one from the person sitting there that day.
2 votes Thank Flag Link Sun Aug 26, 2007
Thanks for your concern Ruthie. I will keep it in mind for any future posts. However for this guy.....

I call`em the way I see`em.

The post stays.
2 votes Thank Flag Link Sun Aug 26, 2007
Mr.P, Other/Just Looking in Arizona
MVP'08
Like all agreements, what was your original conversation about working together? I know many agents have a standard rebate offer- 30-50% of commission back at closing-if your agent has this kind of marketing offer advertised out there somewhere, then maybe. If you first contacted the agent AFTER locating the property and didn't talk about this or ask for something back at that time--put yourself in the agent's place. Why did you decide to use this agent in the first place?
2 votes Thank Flag Link Sun Aug 26, 2007
The Realtor owes you absolutely nothing. Maybe you can thank your Realtor for helping you with the negotiating, financing and final close of escrow.
1 vote Thank Flag Link Mon May 26, 2014
KICK BACKS ARE NOT LEGAL.

.Your agent can credit you some money to help you with closing cost through escrow if they choose to.

As for a closing gift, most agents will give a gift of some kind at closing, but it is not something you should ask for or demand.

Even if the agent did not find the home for you, there is a tremendous amount of work he/she had to do on your behalf in order to get an offer accepted and a deal closed, so please do not minimize the amount of work they had to perform, or feel in any way that they did not actually earn their commission.

Best of luck tp you,
Kawain Payne, Realtor
1 vote Thank Flag Link Mon Jul 30, 2012
REBATES ARE LEGAL in 41 of the 50 states!
You might want to read up on that before you make such a statement. Each state sets its own standards and format for offering rebates.
Flag Mon May 26, 2014
I don't have a problem with Mr. Homebuyer asking the question. I think he got a lot of answers pointing in the same direction. I don't fault him for asking and I think my first response did not suggest that he should not have asked at all. I just made it clear that I thought he should have asked the agent up front instead of later after the close of escrow. This is a hot topic for agents mainly because a lot of people don't really understand how involved our jobs are. Frankly, before I became a real estate agent, I did not think about it a whole lot either.
Lastly, I am glad that the professionals that are posting here call others on the proverbial carpet when we say something that does not sound right. That's one reason why I believe that it's worth my time to post my answers here. I enjoy the exchange of ideas and the ethics of my fellow agents here. When someone gives me a thumb down, I would really appreciate an explanation going along with it as that's what makes it a learning experience. And Ruth, sorry if I have a few typos. I'll try to proofread, but it's really hard to edit your own writing.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Sun Aug 26, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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He asks for money back.... read his question.
His exact words are
"For example, can we ask him to give us a rebate/incentive/"kickback" from his earned commission"

He asks for money three times
1 Rebate
2 incentive
3 Kickback.
Then he says
" From his earned Commission"
What do you think he means when he uses the word "earned"

After the deal is done. After the service is performed. He wants more
We really don`t know what this guy was like?

HomebuyerLA. What is your Realtors name? Lets get his side of the story.

Yes anyone is and should be allowed to ask a honest question, and expect a honest answer.

Was that nicer, Ruth?
1 vote Thank Flag Link Sun Aug 26, 2007
Mr.P, Other/Just Looking in Arizona
MVP'08
Sylvia:
My first thought when I read your first answer was, "How naive?!" But something about seeing "JR" write "kickback" and knowing that English is your second language (I assume you were not born here) made me think that you could be correct. And Deborah with your international experience, please chime in on this as well. In some countries (and in Cicero, IL) it is common place to ask for kickbacks or bribes "Grease the wheels". So if that is the case HomeBuyerinLA, please accept our apologies.

However, I think just asking for a "kickback" would not have raised so many tempers. It was asking for a kickback after the fact BECAUSE he felt the agent didn't do his job before he even hired him. And my husband says I don't contain the "shame" gene.

Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Sun Aug 26, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
And I think that no (o.k. almost no) question is a bad question, especially coming from a consumer. Maybe he did not use the right word, but we all need to be educated.

What he/she does afterwards is what counts.

Sylviia
1 vote Thank Flag Link Sun Aug 26, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
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Patrick, I appreciate conviction.

I do keep an eye out and make sure when I specifically call someone out, if they don't respond, I send them a private email asking them to read the post.

(Carrie, LA and thumbs up was funny! And Jim, so was ethically challenged.)
Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Sun Aug 26, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Hi Ruth. Thank you so much for your input. It is nice to hear from a consumer. After all, we agents strive to serve the public and getting feedback from a buyer is really great and much appreciated. I like this thread because I enjoy learning what others have to say. I learn a lot from everybody's perspectives. The fact that there are so many different answers to one question also shows that there's a lot to know. Thanks again. Ute
1 vote Thank Flag Link Sun Aug 26, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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Interesting question.....however I think in many cases finding the home for a buyer or finding a buyer for a seller is just the basic start of the process. I can think of many of thousands of dollars I have saved my buyer clients versus doing it themselves that had nothing to do with locating their home. Financing is one consideration. I consider that my duty as their agent, but I never ask them to split the savings with me. You can certainly discuss it with the agent, but it could or will depend on what you agreed to in your buyers agreement. I small thank you gift is common, but a refridgerator I'd think is unusual.
1 vote Thank Flag Link Sun Aug 26, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
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I cannot say things more eloquently than already stated. Simply another vote here to say that I think it would be inappropriate to ask, suggest, or expect a rebate.
1 vote Thank Flag Link Sun Aug 26, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
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He played no role in finding the property but he negotiated the sale and everything that came after? Kickbacks are illegal, in certain places realtors can give rebates. I always get my buyers a gift, but not a refrigerator! :)
1 vote Thank Flag Link Sun Aug 26, 2007
Are you a first time buyer? You must have total trust in your Realtor - he or she is responsible to do their job well in hopes of avoiding a lawsuit. This is serious business here - the most important and probably largest investment of your life. Realtors are not allowed to give kickbacks. Hopefully, if you had a good relationship with your Realtor (did you?) he or she will give you a housewarming gift out of the goodness of their heart. I asked if you are a first time buyer just because I want to give you the benefit of the doubt. Everyone goes through their own learning process about how the system works. Hope you got the answer you are looking for...
Web Reference: http://www.DotChance.com
1 vote Thank Flag Link Sun Aug 26, 2007
He might not have been the one to find the property, but he surely was responsible for helping you construct the offer, negotiate terms and assist you in a smooth close of escrow. Knowing Buyer Agents there are many more things he helped with that you might not have noticed. If a problem came up during the purchase, it would be his legal team that would be called upon as well.
I'm sure he worked very hard, as most Buyer Agents do,. In my opinion a person should be paid for their work, don't you agree?
0 votes Thank Flag Link Mon May 26, 2014
This question posted Aug 2007.
The real estate world was a little different then.
0 votes Thank Flag Link Mon May 26, 2014
not to mention that REBATES (not "kickbacks") ARE LEGAL in 41 out of the 50 states in the country! Calling it "illegal" is putting out incorrect information whether you are in favor or rebates or not.
Flag Mon May 26, 2014
You can ask for anything you want ,it would be up to the Realtor to decide what kind of gift to give you at close of escrow ,you are both on the same team with the same goal,to help you get your home .The agent would love if you would continue to be on the team & give referrals to him ,that way you can make it a continuous great relationship ! Good Luck !
0 votes Thank Flag Link Sun May 25, 2014
Hi HomeBuyerinLA

This is a very good question. I think I understand where this is coming from since there are agencies out there that do offer rebates and now buyer's are using this to their advantage.

So to answer your question....

Finding a home is only part of the process, the real work begins when the offer is submitted, working to get it accepted which means writing and presenting the offer in a way that can compete with cash offers, higher offers, buyer's with stronger credit, etc.... Then if the agent succeeded in getting the offer accepted the real work begins once escrow is opened.

Basically, you only saved your agent and yourself the time in finding the property, but the agent took on all the liability when he agreed to accept you as a client.


Monica Hernandez
Bankers Realty Exclusive, Inc
310-293-3335
DRE Lic #01239118
0 votes Thank Flag Link Wed Jul 25, 2012
No problem, Sylvia. :) No apology necessary.
0 votes Thank Flag Link Sun Aug 26, 2007
Yes. And I wanted to ask for the Realtor's side of the story as well.

Hey TRULIA, what is the record for the most responses to a question?
Ruth
Web Reference: http://www.oak-park-il.com
0 votes Thank Flag Link Sun Aug 26, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Thanks, Carrie, for seeing my point and supporting me.

And, Ruth, yes, I am from Taiwan (China), and kickbacks might have been there before (when I was young), but it's not legal there either. I, for one, to be on the record, without getting on my soap box, do NOT condone that!

I do want to apologize for being distracted by J.R.’s pointing out the use of ‘kickback’. My whole point has nothing to do with the kind of question Mr. Homebuyer asked. My point is that a customer has the right to ask, and we should give them our best answer to direct them to do the right thing.

And, no, I don’t know nor do I really care whether Mr. Homebuyer understands the word ‘kickback’ when he asked. But the main thing for me is that he asked; and I truly believe he is not going to do it after reading the answers; because he did take the step to ask with the intention to do things right and legal and I think he will!

Sylvia
0 votes Thank Flag Link Sun Aug 26, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
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I'm just surprised that anyone would wonder if they should ASK for a gift, or as he said later, a "kickback".
I mean when is it appropriate to ask for a gift from an employee (the realtor)?
0 votes Thank Flag Link Sun Aug 26, 2007
You can always ask. We are limited to $25 as a closing gift.

The Realtor does more than finding the property. They have all the liability going thru the transaction....there is writing the purchase contract and negotiating the offer. Once the offer is accepted they have the responsibility of seeing the inspections, appraisal and contingency removals happend in a timely manner. They also go over inspection reports with you and assist you in negotiating repairs. They work with all parties seeing the repairs are completed prior to close. They represent you at the sign off. Then there is the after care!

We really do more than show homes.
Web Reference: http://pamwinterbauer.com
0 votes Thank Flag Link Sun Aug 26, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
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