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Why home buyers can’t negotiate their realtors commission while sellers can?

Many people think rebate is merely a discount in price that is offered to buyers by their suppliers or service providers to boost sales. However, the concept of rebate has more value within the real estate industry.

When a buyer purchases a property in our market, he/she does not need to worry about the commission paid to his/her Realtor as it’s currently structured and often practiced in the real estate market. We understand that this might need a bit more clarity to make the buyer fully aware of what he/she is getting into, so we will try to clarify everything to you.  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? 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.

Rebate is legal in our marketplace as long it goes directly to the buyer, and not anyone else. Furthermore, it gives the buyer a choice to negotiate the commission paid to his/her Realtor directly since the commission was pre-set as per the existing practice in the market.

Some people 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 most efforts performed by the Realtor, which are the showings. For example, there is a certain amount of rebate given back if the Realtor conducts a certain number of showings, and of course, with 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. The rebate system would reasonably draw the scope of work in details with clear expectations from both parties.

 

Ali Salarian,

Vice President & Broker

PPS Realty, Brokerage

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Ali Salarian

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