According to the National Association of Realtors (NAR), over 55% of all Buyers Agent transactions were for properties that were sent to them by their clients. The Buyers Agent makes a showing appointment and if the client likes the property, they'll make an offer. The Realtor earns a selling agent commission which is paid by the sellers listing agent.
What is a Buyer Rebate?
When you purchase a home, a percentage of the price that you've paid for the home is paid to the listing agent as a commission. The buyers agent brings the buyer and the listing agent normally splits the Real Estate commission with the buyers agent. The United States Department of Justice (DOJ) supports Realtor Buyer Rebates and explains that it's a percentage of the Realtors commission and may be thousands of dollars. The Buyer Rebate is paid to you at closing and is normally a credit to the buyer on the closing statement.
Historically, Buyer Rebates have been paid by discount Real Estate Brokers that were not full service and offered less services then a full service Broker. This is changing as there are a small amount of full service brokerages entering the market that provide Buyer Rebates. Full service Real Estate Brokerages that provide Buyer Rebates are limited to newer and more progressive companies. Large and established national Real Estate brands share in an agents commission so providing a Buyer Rebate would drastically lower their profits. National and local traditional brands have infrastructure in place that they need to support and this type of change could place the business in financial trouble.
Do you need a National Brand?
You don't. Some people are under the impression that a national brand will do a better job so they stay away from local unknown Brokers. This is the furthest from the truth. Finding an experienced and honest Realtor that provides a buyer rebate should be your main priority. The national brand won't meet with you, make showing appointments, do contracts or communicate with you, the Realtor will.
How Does a Buyer Rebate Work?
Lets say you purchase a home for $500,000. The average commission is $30,000 (6%) and is normally split between the listing agent ($15,000) and the selling agent ($15,000 Buyers Agent). The buyers agent would then rebate up to 33% of their commission (1% of the home’s purchase price) to you (the buyer) at closing.
WRITTEN BY PAUL SCHLANGER, REALTOR. 561-289-5301
FULL SERVICE REALTOR - 1% BUYER REBATE