Why Are Buyer Agent Commission Rebates So Rare? https://www.hauseit.com/getting-buyer-agent-commission-rebate-explained/
Save Money When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
Why Are Buyer Commission Rebates so Rare?
Discount brokers haven’t taken over primarily because real estate brokerage is a two agent model.
Unlike the travel agent industry which operates under a single agent model, and has thus been completely disrupted and eventually replaced by online travel booking websites, in real estate you need the cooperation of other agents to complete a deal.
90% of real estate transactions are still done today between a seller’s agent and a buyer’s agent. Much of the remainder is done under dual agency, where the seller’s agent represents both the seller and the buyer.
This means that real estate agents need the cooperation of other agents to complete a deal. A buyer’s agent needs to be able to work well with other agents because over 96% of all homes are listed by agents. Listing agents also need to be able to work well with and engage buyers’ agents, because 90% of all buyers are represented by agents.
However, it’s hard to work well with others when your business model is predicated on the failure of others. Just think about it, most discount brokers spend time making noises about how traditional brokers are overpaid and how they’ll work for less. Yet, when it’s time to try to do a deal, they’ll go hat in hand to the traditional brokerage community and ask for a handout. It’s almost comical!
Unfortunately for consumers, rebate brokers are largely boycotted by traditional brokers. It doesn’t take much for a listing agent to Google an unfamiliar broker and to quickly figure out their scheme. A listing broker will undoubtedly inform their seller of the rebate broker’s arrangement with their buyer, which can cause resentment by the seller because he or she is effectively paying commission to the buyer.
Tipping off the seller and the listing agent in this manner can cause a great deal of harm for buyers, especially in a hot seller’s market with many competing bidders. Given other bidders to choose from, it’s not hard to imagine that a listing agent will prioritize an offer from another agent who isn’t out to harm the industry. Remember that listing agents have a lot of leeway on when and how they present offers to the seller, if they do so at all.
Pro Tip: Read our white paper on why do real estate agents still exist in NYC to learn more. There’s a reason why the real estate industry is still charging 6% in commission today, and why everyone isn’t working with a discount broker.
Getting a Buyer Agent Rebate Safely
The only way to get a buyer agent rebate safely is to work with a traditional broker with great working relationships with other brokers, and who most importantly never openly discounts their services. In other words, you should work with a traditional broker who has discreetly agreed to give you a buyer agent commission rebate.
Buyers can do this by asking their real estate agent friends for a rebate, or to simply give them a more substantial closing gift instead of the typical box of chocolates or bottle of Champagne. Keep in mind however that many brokerages will have corporate policies disallowing any sort of discounting or rebates. Furthermore, we’ve seen too many instances of buyers’ agents promising to take their friends out on the town after a deal closes, but failing to do so.
An alternative approach is to start a conversation with one of Hauseit’s partner brokers who have already agreed to discreetly rebate you the majority of their buyer agent fee. All of Hauseit’s partner brokers are established, experienced traditional real estate brokers who never openly discount their services and thereby tarnish their reputations.
As a result, the buyer commission rebate you’ll receive will be discreet in nature. Because our partner brokers aren’t discount brokers, listing agents will take them seriously and not assume that their “buyer” came through because of a gimmick or an app.
You can elect to receive it as a credit to you at closing, perhaps to help cover your closing costs, or as a check given to you post-closing.
Pro Tip: Check out our detailed NYC Buyer Closing Cost Calculator to estimate what you’ll owe at closing and how much money you can save by getting a buyer agent commission rebate.
Can I Get My Rebate Before Closing?
Yes, if you’d prefer to get the commission rebate prior to closing, our traditional partner brokers can negotiate with listing agents to reduce the contract price after an offer has been negotiated and accepted.