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New Home Client Rebates

By Mike Elliott

Real Estate Agent

May 30, 2007 02:44 AM

Here is a question for all the agents and brokers out there.

Recently this has started happening to me. A buyer that I may or may not know, goes to a production builder's new home community and finds a home-all on their own.

Then I get a call from the buyer saying "I've found a home and want to put you down as my Realtor. I want X percent in return for doing all the work".

Does this happen to you? What is your response?

Maxwell McDaniel

www.AustinAPlusHomes.com

Comments(7)

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Bettina Clairmont

Bettina Clairmont - San Francisco, CA

CPA

It hasn't happened to me with a new home, but it has happened to me with resale homes. Generally, I have no problem giving them a rebate on the buyers side commission since really I didn't have to do much work for them at all.

May 30, 2007 02:49 AM

Mike Elliott

Austin, TX

I feel the same way, I go ahead and do it, depending on the request. Of course, if they have a home to sell, all the better. As a full service agent, I feel that being flexible on commissions in situations is a competetive advantage to some of the discount brokers.

May 30, 2007 02:52 AM

Jennifer Kirby

Kirby Fine Homes - Minneapolis, MN

The Luxury Agent

I have never had that happen. If you are giving them back the commission, then what is the point of being involved at all? If you decide to do this, and they do all the work, then you are taking on the liability no matter what. So if something goes wrong and is not disclosed, even though the buyers are the ones who "did all the work" they could legally come back and say it was all your fault, as you were their agent. A mess I don't think I would want to be a part of.

May 30, 2007 03:18 AM

Mike Elliott

Austin, TX

Jennifer-Good question and point.

I would never give back 100% of the commission as that would be a win-lose situation and not something I'd want to be a party too.

I look at commissions the following way:

If I'm not capped then

1% goes to KW

1% goes to my overhead to run the business, keep the lights on and put gas in the car

1% puts food on the table

Since those are rough numbers, I think it's pretty easy to give back a point or maybe a point and a half if I'm capped and not paying anything to KW. I view this as a win win.

May 30, 2007 03:31 AM

Venice Harris

EXP Realty - Conyers, GA

Real Estate Agent - Conyers, GA

Wow, I hope this is not the new trend. :-o

May 30, 2007 07:17 AM

Frank Harris

Keller Williams Realty Centre - Columbia, MD

That has not happened to me, I have been lucky enough to have past clients sign me up with a builder as their Realtor, they were savvy enough to understand that having representation is good whether you are buying resale or new. But to answer you question...No it has not happened to me. If a rebate is allowed in your state go for it, but what kind of percentage is the buyer talking about and what work will they be doing?

Jun 10, 2007 01:13 PM

Mike Elliott

Austin, TX

It really varies on what's been done. In some cases, we've just gotten a call from a client that says "I just bought a new home and put you down as my Realtor". You don't have to do anything, but I'd like to split it with you either 50% /50% or 70%/30%.

So the contracts are already done, really EVERYTHING is already done. I just end up getting a check for picking up the phone.

Of course, I'd prefer it if this were not the case. I do believe that it's very beneficial for a client to have representation when working with a new builder and they're probably leaving money on the table (or free upgrades).

I'd say in the end, I'm happy they at least had the thought to put me down as opposed to getting nothing.

Jun 11, 2007 04:25 AM