Buyer rebates are a complex and easily misunderstood aspect of some real estate transactions. Some buyers believe that agents routinely kickback part of their commission to the buyer, but the bulk of agents do not.
There are situations that arise in a transaction, however, that make a credit necessary, if simply to keep the peace. For example, say, during the final home inspection walk-through, the buyer notices that the refrigerator, which was supposed to remain with the home, has been removed by the seller. This happens more often than you would think. So, the buyer demands a new refrigerator. The seller, in turn, often blames the listing agent and refuses to return the old refrigerator and / or buy a new appliance for the buyer.
The buyer has options. The buyer can refuse to close. But few choose that course of action because the house matters more than the refrigerator. The buyer can close and sue the seller for refusing to abide by the contract. Few want to file suit, though. So, to make everybody happy, sometimes the listing and buying agents will split the cost of a new refrigerator through a partial commission credit to the buyer.
In a transaction I closed a few months ago, the buyers refused the credit. I was astonished. The listing agent had made a promise to the buyers and then broke it. The buyers were distraught. So, I offered to throw a credit to the buyers to make up for the listing agent's misrepresentation. I didn't have to offer it, but I'll move heaven and earth if need be to keep clients happy. The buyers said no, it wasn't my fault and they didn't feel I should pay for it. But that doesn't happen very often, either!
Read more about commission credits to buyers.
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