A buyer rebate is when a real estate company offers a percentage of their commission, or a set dollar amount back to the buyer at closing. In some cases, the buyer may be doing some of the leg work in order to “earn” the rebate. Some new and unique business models may even set the appointment for the buyer, thus allowing the buyer to see the homes on their own (without the intrusion of an agent) and take their time, ask sellers questions, then let the agent know when and if they would like to make an offer. There are many advantages to this for both parties. The buyer can get a healthy rebate, sometimes thousands of dollars, and the agent can be back at the office, at home, or on the beach while his buyer looks at property. Once a property is selected, the agent should then tour the home with the buyer to make sure it is a good investment, and to be able to better guide the buyer properly and professionally.
This relatively new concept is available to many buyers in many states. But not in New Jersey. Why? The law does not allow it. So I asked my local Senator about it. Boy, he played dumb. He told me “Get it done through your local Board of Realtors”. I reminded him that we do not have the ability to change the law. Then I found out that the NJ Association of Realtors (NJAR) regularly contributes to his campaign warchest.
So, there you go. Traditional Realtors do not want to be competing with brokers who wish to give buyers rebates. It’s that simple. On one hand, consumers have anti-trust laws to protect them, which prohibits real estate practitioners from banding together and establishing a “standard fee”. This allows the competition of the marketplace to offer different options and commissions for sellers, and opens the playing field for different business models such as my own. On the other hand, the law prohibits me from doing what I wish to do with my selling commission. (The average commission in my town on a sale is approximately $6,300. I could figure out how to benefit the consumer with a portion of this.)
It’s this simple. Remind your local lawmaker that you want yourself, or child or grandchild to be able to get a rebate when they buy a home. Tell them to make it legal for a Realtor to give a Buyer Rebate! If they tell you “No”, ask them if the NJAR is in their ear and funding them.