Are Buyer Rebates Legal to Give Buyers Who Buy A Home?

Only 12 states have said that giving a buyer part of the agent's commission when the buyer buys a home is illegal in their state. The others have said - give the money back, it is legal. The states are Kansas, Alaska, Mississippi, Oklahoma, Iowa, Louisiana, New Jersey, South Carolina, Missouri, Rhode Island, West Virginia and New York. If you don't live in one of those states, buyer rebates where an agent shares a commission with you is legal. A lengthy article was circulated by the Realtor Association as many more inquiries were being posted to the individual state real estate commissions.

What Is a Buyer Rebate?

What we are talking about here is an agent agreeing to split or share their commission with a buyer who is the principal in the transaction. This has been done for years if your mother was the real estate agent or the agent agreed to take less of a commission to make the deal work. Some companies do it based on the amount of houses that you see with the agent where others will give you a buyer rebate if you are simply their client. The rebates range from half of the commission to as little as $150.00. But still, isn't that better than a fruit basket at closing?

Who is Leading the Industry?

At one company in Atlanta, they share their commission up to 50% of the total commission, when a buyer helps them do what the buyer is doing anyway, which is help their agent find the home that they want to buy by driving by homes and searching the internet. "We apply this rebate to any listed home, for sale by owner or new construction. The only catch is, that the client must hire us in writing to represent them," says the owner and broker of the company. "We successfully gave 323 buyers money within 5 days after closing in 2007 and ultimately saved these folks, made these folks, whatever you want to call it, $1,169,137.73 in cash. That's a lot of whatever you want to call it!"

"Buyers need to understand that this is their money. They are doing the work and they deserve the money. Another way to look at is that if the seller was not paying a commission, the buyer may get a better deal. The buyer is actually getting the best of both worlds with our Buyer Cash Bonus because they get the expert representation of someone who works volume while getting a check that averages $4200.00 on average. Our goal is to give every buyer in Atlanta a check after closing while supplying them the best representation that we have studied and strategized over for the last 6 years and thousands of deals," boasts the top agent of the company.

Learn the Law - Protect Your Rights

To learn more about your state and the laws regarding Buyer Rebates or Buyer Cash Bonuses would be a smart move considering that most states have given you, the buyer, the right to get money back at closing! Don't forget that this whole process for a buyer is free. The seller is paying for your representation. You might as well use it.

If you would like more information about buying a home, I invite you to my buyer website resource.

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