“Rebates is the best way for homebuyers to negotiate their agent commission”
We all know that a rebate is merely a discount in price that is offered to buyers by their suppliers or service providers to boost sales. What if I told you that the concept of rebate has more value within the real estate industry. Because now, the homebuyer have a strong negotiation power.
Before purchasing a property, the homebuyer, does not discuss the commission paid to his Realtor. Because the commissions for both parties’ Realtors are built in the price, and it’s negotiated and decided between the seller and the listing Realtor in advance before listing the property on MLS. You may wonder why your Realtor who is representing you and protecting your interest, is paid commission fees by someone else? Isn’t it a conflict of interest or a twisted concept? But with Rebates, you have the choice to negotiate the commission paid to your realtor.
Some will argue that the rebate may cause a discount in service level in term of experience or performance. However, this can be mitigated by relating the rebate amount to the quality of service performed by the Realtor. For example, there is a certain amount of rebate given back if the Realtor conducts a certain number of showings in addition to proper offer negotiation and complete follow up till the closing date (as mandated by the regulator regarding the duty of the Realtor towards the client).
Rebate is legal in our marketplace as long it goes directly to the buyer, and not anyone else. The rebate system would reasonably draw the scope of work in details with clear expectations from both parties.