As seen in The Real Estate Journey
March 28, 2007
Many agents state that giving a buyer a cash bonus after closing is not legal. What is it that they want to hold back from their buyer? Buyer Rebates or Buyer Cash Bonuses are legal in 38 states.
As stated in Realtor magazine for consumers and agents, only 12 states have said that giving a buyer part of the agent’s commission 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.
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.
At Duffy Realty of 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 Rhonda Duffy, owner and broker of Duffy Realty. “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!” says Duffy
“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 Duffy.
To learn more about your state and the laws regarding Buyer Rebates would be a smart move considering that most states have given you, the buyer, the right to get money back at closing!