Congratulations on getting this far. Most New York home buyers are not even aware of the possibility that they can receive a buyer agent rebate in NYC.
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Is It Possible to Get a Buyer Agent Rebate in NYC?
Not only are NYC homeowners punished by the real estate brokerage industry with a typical NYC real estate commission of 6% on the highest home prices in the country, NYC home buyers are also somehow collectively never made aware by their buyer agent representatives that NYC buyer closing credit are legal.
NYC Buyer Closing Credits Save Home Buyers Thousands.
In this article we’ll explain some common dangers buyers associate with using a discount buyer’s real estate broker and how to properly get a buyer agent rebate in NYC without endangering your chances of closing a deal. We’ll explain why discretion is so important if you choose to get a buyer agent rebate in NYC and how working with your average mom and pop rebate broker can cause resentment and risk your deal. After all, what’s a few thousand dollars worth if you don’t get your dream home in the first place?
Why Are Buyer Agent Rebates so Rare for Home Purchases in New York City?
We think the reason getting a buyer agent rebate in NYC is so rare is because most NYC home buyers are reasonably well off and inventory scarce enough that they care much more about access and probability of closing versus getting any sort of rebate incentive.
Moreover, NYC home buyers are worried about the perception of working with a discount agent who the listing agent may discriminate against. The latter is a real cause for concern.
Traditional listing agents who look up the buyer agents’ profile and see that it’s someone who primarily provides discount services and rebates will understandably have some negative bias towards that buyer agent. Just remember, listing agents of million dollar properties in New York City are not dumb. It doesn’t take much to simply Google an unfamiliar mom and pop rebate broker’s name to see what they’re up to. Then you’ll really be in trouble!
Are Buyers at a Disadvantage by Working with a NYC Rebate Broker?
Even though it is unethical and potentially illegal for the listing agent to discriminate against a rebate buyer broker’s offer, it is not unheard of for listing agents (who are in control of the flow of information) to present bids to sellers in such a way as to encourage the seller accepting another offer versus the one made by a NYC discount broker.
While this is outright illegal if the discount broker’s bid is higher, it is much more of a gray zone when the bids are approximately equal and there are other considerations at play such as degree of financing, financial status, mortgage contingency, sale or Hubbard contingencies etc. that the traditional listing agent can use to his advantage. For example, a nefarious listing agent may tell the seller that the buyer will be saving money from both the buyer agent rebate in NYC as well as the purchase CEMA mortgage which he’d like to do to save on his NYC real estate taxes. As a result, because the buyer is getting a better deal perhaps he should pay more, or the seller should simply reject it because of the additional “complexity” this brings with no benefit to the seller.
It is not uncommon to hear stories of traditional listing brokers, who do represent the majority of real estate listings, to punish client bids made by discount buyers’ agents by either presenting their bid to the seller late or in a negative light (claiming they are unprofessional, tough to work with, unreliable, etc).
Assuming the discount broker providing the buyer agent rebate in NYC does have the best bid, the listing broker could always ask for the second and third best bid to improve their price (in effect, giving them a “last look”). Assuming the second and third place bidders do improve their price to first the unscrupulous listing agent could then in theory close the best and final offer auction without also giving the discount broker’s client a chance to re-bid higher.
As you can see, using a NYC discount buyer agent providing a rebate can be a real headache for home buyers who do not do it right.
Do Discount Buyer's Agents in NYC Have Access to All Property Inventory?
Another concern buyers have against using a discount broker for a buyer agent rebate in NYC is the perception that discount agents don’t have the same access to properties that a traditional agent does. This concern is blatantly not true as agents are obligated by their association bylaws to immediately post all exclusive listings after signing an Exclusive Right To Sell Listing Agreement. All listings will then be syndicated to dozens of popular consumer search websites such as the New York Times, Brownstoner or StreetEasy as well as the local inter-broker databases like RLS (REBNY Listing Service).
In the recent past, many unscrupulous listing agents would try to sell their new exclusive listing to an unrepresented buyer within the first 48 hours before they’re forced to show it to other agents in their local brokerage database, and thus keeping the full 6% sales commission. However, new REBNY rules now require agents to syndicate a new listing to all portals including the RLS when the listing is first brought to market. That means listing agents can no longer first post to a public search website in the hopes of finding a direct buyer before sharing it with buyers’ agents on the RLS.
Do Discount Buyer's Agents Have Access to NYC Pocket Listings?
Another popular refrain from traditional buyers’ agents is that they have access to off-market properties or “pocket” listings. Pocket listings have become popular in recent years and are used primarily in a hot market by people wishing to maintain more privacy (i.e. not holding big open houses or having their address and possibly contact info spread all over the internet).
Even though it is not in the best interests of the seller to do so from a price perspective because they are essentially inviting less people to an auction for their house, pocket listings continue to be popular for the reasons described above.
NYC listing agents typically will make sure their client signs a disclosure form acknowledging that their home will not be broadly advertised in their local brokerage database and major sites. Then they will typically email a list of brokers and serious buyers (that they personally keep), inviting them to an exclusive look at the property. Given the negative reputational consequences of being a full time discount broker, someone offering a buyer agent rebate in NYC will likely not make it to a traditional listing broker’s mailing list. This is yet another reason why you should work with a traditional, brand name real estate broker who has discreetly agreed to provide you with a rebate through Hauseit!
Will a Rebate Broker in NYC Be as Motivated to Provide Good Service?
The last worry many buyers have about hiring a known discount broker to provide a buyer agent rebate in NYC is that the agent won’t work as hard in negotiating on behalf of the buyer and closing the deal because he’s not paid as much as his peers. This may be the case depending on whom you hire, but there are many professionals who will work just as hard for 2% as someone working for 3%. If you pick carefully and work with a pre-screened, seasoned professional you won’t have an issue on this one.
The simple solution to securing a buyer agent rebate in NYC while avoiding these common problems is to work with a top rated, brand name, traditional buyer’s agent who doesn’t engage in rebates full-time, whose image is 100% full-service, and who discreetly provides you with a rebate at closing. Hauseit has partnerships with many of the most seasoned real estate professionals in New York City who are willing to provide you with the same full service their normal clients would expect, the commission rebate you deserve while maintaining their anonymity. The sellers and listing agents won’t know you’re getting a better deal. No one will know the difference except your pocketbook. It’ll be our little secret!
Read this article in PDF format: How Do I Get a Buyer Agent Rebate in NYC?
Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).