The Way Real Estate Rebates Are Used

Rebatesare one type of marketing tactic used to entice customers to a brokerage. At or after closing, a part of the commission provided by the seller's broker to the agent who brought the buyer is credited/rebated to the buyer.

It is not legal in every state. The Department of Justice thinks that the right to refund buyers is crucial for competition and lower costs for consumers, and is working to get anti-rebate laws repealed in states that have them.

Of course, asking 100 real estate expertswhat they think about rebates will spark a vigorous debate. There is a lot of opposition to any procedures that minimize commissions, yet refunds are becoming more popular and widely used. In general, rebating 1% of the purchase price on the buyer side equals around one-third of the buyer agent compensation. That is not poultry feed.

 

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