Things That Could Go Wrong With a Realtor Rebate in NY
The concept of a Realtor rebate and discounting in general has been around for as long as there have been real estate agents. While it’s tempting to sign up for the first Realtor rebate you find online, it’s important to understand what could go wrong with a Realtor rebate in New York and why everyone isn’t doing it.
Why Isn’t Receiving a Real Estate Rebate More Common in NY?
A cashback Realtor is a rarity in New York State and New York City because the vast majority of real estate agents work for traditional brokerages that are loathe to tarnish their reputations by openly discounting their services. Most traditional brokerages will discourage and often outright prohibit their real estate salespeople from working for less than the typical commission rate in New York State and NYC.
Furthermore, if smaller brokerages try to openly advertise a Realtor commission refund or some sort of a Realtor kickback, they’ll be penalized by other traditional brokerages who will stop cooperating with them.
No traditional broker is going to willingly cooperate with a discount broker who they think is trying to disrupt the industry and their livelihoods.
Furthermore, a small brokerage who tries to break ranks by offering a Realtor cashback to its clients will undercut its normal referral business. Think about it. If a small brokerage decides to become a cashback Realtor and openly advertises that it’s willing to give a buyer agent commission refund, won’t the next full commission referral demand the same discount?
As a result, a small brokerage that tries to break ranks not only will incur the wrath of the wider brokerage community whom they need in order to do business, but they will also permanently destroy their ability to earn a full commission rate on any referrals they’d normally receive.
Who Is Your Typical Rebate Agent in New York?
Because traditional brokerages large and small won’t engage in house purchase rebate schemes for the reasons previously discussed, you’re left with a very small number of mom and pop operations that try to lure buyers with the promise of a Realtor kickback through online advertising (i.e. Google Adwords).
Unfortunately for NYC home buyers, getting a Realtor rebate through your typical fly by night cashback Realtor can be a disaster and can drastically hurt your chances of closing.
Think about it. Why would traditional brokers who control virtually all listings agree to split commission with barely legal one man shops who they view as having cheated to steal a buyer client?
Even if the agent providing the closing cost rebate is a member of the local NYC MLS (Multiple Listing Service), traditional listing brokers will be loath to cooperate. At a minimum you can expect the listing broker to take several days to present the offer to the seller in a very negative light, if at all.
Furthermore, the listing broker will take as much time as possible to shop the cashback Realtor’s offer with all other possible buyers. Lastly, once the listing broker tells the seller about the buyer’s refund of commissions scheme, the seller will mostly likely resent the fact that the buyer is trying to cheat to get a better deal.
Note: We’ve heard stories of buyers losing a deal because they tried to secure the co-broke directly for themselves because either they or their spouse was a lawyer with a broker’s license on the side. Even though the seller eventually agreed to let the buyer represent himself and collect half the commission, the seller held a grudge against the buyer throughout the entire process. This resulted in a best and final where the buyer was shopped heavily even though he improved $10,000 more than his original bid and won the auction. The resentful seller found a neighbor looking to buy their property who was willing to pay slightly more than the winning bid and sold it to the neighbor instead. What a shame!
How to Get a NYC Commission Rebate Without Harming Your Deal
The only way to get a buyer agent commission refund without seriously jeopardizing your deal is to work with a traditional, brand name real estate broker who never openly discounts their services.
Fortunately for home buyers in New York, all of the partner brokers who work with Hauseit are full service, traditional, brand name real estate firms with great working relationships with the wider broker community. None of our broker partners normally nor openly discount their services or tarnishes their reputations in any way.
By working with one of our elite partner brokers, you’ll truly get the real thing! No one will know you’re getting a better deal when you discreetly receive your rebate check post-closing. It’ll be no different than receiving your typical bottle of Champagne or box of chocolates, except the broker closing gift you’ll receive in this case will be $20,000 or more in post-closing equity!
Furthermore, it’s important to point out that our partner brokers are all highly experienced, senior brokers or even principal brokers at their firms. Our typical partner broker has done over 100 real estate transactions in the previous 12 months, easily putting them within the top 1% of all real estate brokers nationwide.
You’ll definitely want to work with someone who knows what they’re doing and who can guide you through all the common pitfalls of the buying and closing process especially if you are a first time home buyer.
The last thing you’ll want to do is to further risk your deal by working with your typical, inexperienced mom and pop rebate broker who is barely licensed. Your typical shady discount broker has zero industry experience, no deal experience and is recently if at all licensed. Assuming that their operation is even legal, your typical cashback Realtor is usually a sketchy individual who thinks that you should trust the most important transaction of your life to him just because he has a license and is willing to work for less.
What a mistake that is! Rebate or no rebate, a property transaction in New York is highly complex. The last thing you want is to have a rookie mess up your deal and give you bad advice, in addition to annoying the listing broker and seller. What a recipe for disaster that is!
When Is It Too Late to Loop in a Rebate Agent on My Deal in NYC?
It’s too late to loop in your average cashback Realtor who openly discounts as soon as you have directly inquired on a listing or visited a property. That’s because your average listing broker will become absolutely furious if you try to loop in a sketchy cashback Realtor just to make an offer, but after the listing broker has shown you the property directly.
Your typical listing broker is not going to meekly hand over half their paycheck to someone who they view as cheating. They will make the life of the cashback Realtor and the buyer receiving the Realtor rebate as difficult as possible.
You may even have to ask your real estate attorney to step in to demand that the listing broker cooperate with your rebate agent. But ask yourself, how troublesome and embarrassing is all of this? Is a house purchase rebate even worthwhile if it entails this much trouble, headache and embarrassment?
However, if you are working with one of our highly rated, brand name traditional broker partners, you can safely loop them into your deal at any time before you’ve submitted an offer.If you try to loop in a buyer’s agent after you’ve already submitted an offer, it may be hard for your buyer’s broker to prove that he was the procuring cause of the sale.
If the offer you submitted directly was not accepted or if you received a counter-offer of some sort, you may still be able to loop in one of our partner brokers. In this scenario, you will need to really vouch for our partner broker and perhaps even mention that your real estate lawyer was insistent on you having a good, dedicated buyer’s advocate.
Please see below for an example email of what a buyer sent to the listing agent after he had signed up for a buyer agent rebate.
Dear listing agent, after speaking with my lawyer, I’ve come to realize that I really do need my own agent to guide me through this process. Going forward, may I ask you to please work with my buyer’s broker who is copied on this email? Thank you!
Though not recommended as it’ll be sure to cause much angst to the listing agent, you may be able to loop in one of our partner buyer’s brokers even after you have an accepted offerdirectly with the listing agent! Here is an example email of what a buyer sent after he had signed up for a home buyer rebate.
Dear listing agent, thank you for your help with our original offer. My wife has had a change of heart since we last submitted our offer, and our buyer’s broker who is copied on this email has been instrumental in convincing us to stick to this deal. We’ve seen some other properties with our buyer’s broker in the meantime and he has convinced us of the merits of buying your listing instead. Can you please work with our buyer’s broker going forward? Our deal is contingent on being able to have our own buyer’s Realtor through the process. Thank you.
Read the Full Article: https://www.hauseit.com/what-could-go-wrong-with-a-realtor-rebate-nyc/
Disclosure: Hauseit (https://www.hauseit.com) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).
