This question will probably generate various responses from agents/brokers with various business models. In Illinois, rebating a portion of an agent's commission to a client is perfectly legal. The laws vary on whether licensed agents can rebate commission in various states however - so you might get differing answers depending on where the agent is from.
The notion that an agent that â€œrebates commission = subpar customer serviceâ€ or is less experienced is completely false. Some agents will use the "you get what you pay for" argument, but this is simply a scare tactic to try and convince you that by using an agent that rebates you are automatically doing yourself a disservice. The truth is - many agents do not truly keep 100% of what they earn. Out of their commission, most pay desk fees, brokerage fees, advertising fees, etc. Depending on their model, some actually only keep 75-80% (and sometimes less) of what they are paid by the cooperating brokerage.
In the interest of full disclosure, I work for a company that allows me to keep 100% of what I earn, minus a small fee (under $500) per transaction. Other than that, I pay an additional $40 per month, for desk/processing fees. My company doesnâ€™t have the additional expenses that other brokerages choose to take on to generate extra business for their agents, like TV advertisements. I also have minimal support, no â€œfloor timeâ€, etcâ€¦â€¦I have the freedom (and challenge) of having to truly generate almost ALL of my own business. Since my brokerage fees are minimal, I do offer my clients a small rebate as a thank you - however this amount is much less than what most other agents pay their brokers per month. My point is, generally ALL agents will "rebate" or forsake a portion of their commission. The question is - are they giving it to you........or to their broker.
At the end of the day - rebate or no rebate - the most important thing is to choose a full service agent that you trust, and that has the competence and experience to get the job done. Hope that helps!