As a NYC home buyer who may have just heard about the concept
of a broker commission rebate, you are likely asking yourself –
are lucrative buyer’s agent commission rebates legal in NYC?
Broker Commission Rebates in NYC are 100% Legal
and Encouraged by the State of New York
In this Hauseit tutorial, we discuss the common questions
home buyers have about broker commission rebates in New York City.
We also explain how you can request a commission rebate
and save thousands simply for buying a home in NYC.
What is a NYC broker commission rebate?
A buyer’s agent commission rebate is a cash rebate offered to a home buyer
from his or her buyer’s agent as an incentive
for working with them on a property purchase.
How are broker commission rebates legal?
Despite what you may hear from traditional buyer’s agents,
broker commission rebates in NYC are 100% legal.
If you request a broker commission rebate as a buyer in NYC you can expect
to receive a significant cash incentive simply for purchasing a property.
New York is one of 40 states where receiving a broker commission rebate
is permissible and encouraged by law.
Specifically in New York City, broker commission rebates are 100% legal
as per the New York State Real Property Law Articla 12-A, Section 442.
There is no limit on the amount or type of incentives a broker
can offer to his client as a means of securing a client’s business.
Commission rebates are being actively promoted by New Yorks’ Attorney General
and Antitrust Division as a means of increasing competition
in the real estate industry and reducing overall real estate commissions
when buying and selling property in New York City.
Who pays for a NYC buyer agent commission rebate ?
Sellers pay for 100% of your buyer’s agent commission rebate.
The average New York City real estate commission rate paid
by sellers is 5-6% of the sale price.
When a buyer is unrepresented,
the full 6% commission is pocketed by the listing agent.
If a buyer has representation, then the 6% commission is generally split equally
between the listing agent and buyer’s agent.
On a typical NYC listing with an asking price of $1.5 million,
the seller will pay around $90,000 in real estate commissions.
The buyer’s agent will earn $45,000 in commissions for representing the buyer.
If the buyer has requested a NYC commission rebate he or she could receive
up to $15,000 in the form of a cash commission rebate at closing.
Will I save money on my purchase price by being unrepresented ?
A typical NYC home buyer will not save any money on the purchase price
simply by choosing to be unrepresented.
Because of the way NYC commissions are structured,
sellers have already agreed to pay 6% in real estate commissions no matter what.
The only thing that’s up for debate is how that 6% will be split.
It will either be 100% kept by the listing agent (if the buyer is unrepresented)
or shared 50/50 with the buyer’s agent.
As a home buyer in NYC, you benefit when it’s shared with your buyer’s agent
because you can receive a 1% broker commission rebate from your buyer’s agent.
Will I be discriminated against by listing agents
for receiving a NYC broker commission rebate?
Absolutely not.
It’s illegal and a violation of the State and Federal antitrust laws
for any agent to discriminate buyer’s agents
who work for reduced commissions or offer rebates.
The State of New York actively investigates and prosecutes brokers
who engage in any form of boycotting or discrimination.
Another reason why a NYC home buyer requesting a broker commission rebate
won’t be discriminated against is because the listing agent
doesn’t need to know about your private arrangement with your buyer’s agent!
Why should a NYC home buyer work with a buyer’s agent?
When searching for a property in NYC, home buyers are presented with two options.
They can either choose to search on their own and then work directly
with the listing agent for a particular property.
Alternatively, NYC home buyers can work with a buyer’s agent throughout the search.
A buyer’s agent assists with everything from the initial search
through to offer submission, negotiation, board package preparation
and the overall journey towards closing.
There are two compelling reasons to work
with a buyer’s agent as opposed to being unrepresented.
1. First and most importantly, represented buyers
can earn a NYC Broker Commission Rebate – Buyers who receive a 1% commission rebate
from their buyer’s agent on a purchase in NYC can receive $15,000
and in some cases significantly more simply for deciding
to buy a property and requesting a NYC commission rebate.
2. The second reason to work with a buyer’s agent
is that their services are completely free to buyers.
Sellers in NYC pay 100% of all real estate commissions,
including the percentage which is paid to a buyer’s agent.
If you are unrepresented, you do not have anyone
at the deal table representing you and your best interests.
The listing agent’s only fiduciary duty is to the seller.
How do I request a NYC broker commission rebate?
To request your NYC broker commission rebate,
simply contact Hauseit today to get started.