Where does the broker rebating the buyer have to be disclosed?

Asked by Phung Nguyen, Mon Mar 25, 2013

Does it have to be disclosed on the:
- BC60 Exclusive Right to Buy (buyer agency contract)?
- CBS1-10-11 Contract to Buy and Sell Real Estate-Residential?
- HUD-1?

Any help is appreciated. Thank you,

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Ron Rovtar, Agent, Boulder, CO
Wed Mar 27, 2013
Hi Phung Nguyen:

The HUD-1 is the financial accounting of everything involved in the closing, including any rebate. For everyone's protection, every penny involved in the transaction must be on the HUD-1

BTW: I would respectfully disagree that the commission should never appear in the Contract to Buy and Sell. Here is why: there are occasions where the buyer has guaranteed a minimum commission in Colorado's Exclusive Right to Buy Listing Contract (#7.1). If this is the case and there is any question about who will pay the commission or how much the commission will be, then I would suggest that describing the commission and establishing that the seller will pay is a protection for the buyer that should be included under "Additional Provisions." This can happen in a number of cases, the most common probably being cases where the property has not been listed on the MLS.

Kind regards,
Ron Rovtar
Front Range Real Estate, Ltd.
Prudential Real Estate of the Rockies
0 votes
Joetta Fort, , Arvada, CO
Tue Mar 26, 2013
Agents are NOT party to the Contract to Buy and Sell and commission issues do not belong on that doc.
0 votes
Bill Pearson, Agent, Denver, CO
Mon Mar 25, 2013

All of the answers are correct so far. Disclosure is key in the Real Estate Business and the HUD-1 needs to state the information as well as the lender need to know.

Much success on your transaction!

Bill Pearson GRI, SRES |"Your Denver Realtor For Life"
ERA Herman Group Real Estate| 201 Columbine Street| Suite 301| Denver CO 80206
720-329-1470 |Bill@DenverRealtorForLife.com
5280 Magazine FIVE STAR Real Estate Professional – 2010, 2011, 2012
0 votes
Kasha Songer, Agent, Denver, CO
Mon Mar 25, 2013
And, give the lender an early heads up about the rebate.
Robert and James are correct when their answers are combined.
0 votes
Robert McGui…, Agent, Denver, CO
Mon Mar 25, 2013

The best way to disclose it is to do an 'Amend/Extend w/Broker' if it was not on your original Buyer Agency Agreement. Then on an 'Amend/extend' to the contract signed by buyer and seller so the title company has a contractural agreement in writing that authorizes them to put it in the HUD-1. Broker rebates to the buyer are in this market. But if for some reason you do it this would be my suggestion. Your Buyer's Agent should be your first source of answers to questions such as this.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes
JOHN A ZAMBR…, Agent, Arvada, CO
Mon Mar 25, 2013
This must be disclosed on the hud 1 statement
0 votes
James Ponzi, Agent, Denver, CO
Mon Mar 25, 2013
Hi Phung Nguyen,

It has to be disclosed on the HUD-1 Settlement Statement at the closing. The lender should be aware of this prior to closing so they can approve it also.
0 votes
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