How to Get a Buyer Agent Commission Rebate in Miami

Buyer agent commission rebates, also colloquially known as buyer broker rebates, buyer rebates, buyer closing credits, buyer commission credits, home buyer rebates, Realtor rebates or buyer agent rebates, aren’t something most home buyers in Miami or Florida generally know much about.

It’s no surprise this is the case given the incentives Realtors have to keep the fact that it’s possible to share commission with the buyer as a customer incentive a secret. After all, shouldn’t buyers continue to believe that working with a Realtor for “free” is good enough?

Can a real estate agent give commission to buyer in Florida?

Yes, a real estate agent can give commission to a buyer in Florida per part (2) of Fla. Admin. Code R. 61J2-10.028 which states:

(2) The sharing of brokerage compensation by a licensee with a party to the real estate transaction with full disclosure to all interested parties is not considered a violation of Chapter 475, Part I, Florida Statutes.

Therefore, it is legal in Florida for buyers to receive part of a real estate agent’s commission as long as disclosure of such commission rebate is provided to all interested parties. Conservatively that should mean at the least providing disclosure to the buyer’s lender, if the buyer is getting a mortgage, as it could impact the lender’s appraisal or other internal risk metrics.

Even though the language doesn’t specify exactly who or what roles should be notified, conservatively you could assume that the seller, attorneys, closing agents, title insurance company, appraisers and Realtors should know how much commission is being rebated to the buyer.

Keep in mind that often times by notifying one party, such as the seller’s agent, you can de facto notify multiple parties at the same time such as the seller whom you may not be in direct contact with.

Legality of buyer rebates in Florida. Asking the buyer's agent vs seller's agent for a rebate. Mechanism for payment of rebate & more.

The same goes with the closing agent who may be the only one in touch with the title insurance agent, as often times Florida closing attorneys act as the title agent, the escrow agent and the closing agent simultaneously.

Pro Tip: Make sure you notify all interested parties in the transaction, meaning all relevant parties to the deal, in writing ideally by email so you have proof of disclosure in case this is ever questioned in the future.

Why asking the seller's agent for commission is a bad idea

While it’s theoretically possible to get a commission rebate from the seller’s agent, this almost never happens and is not a good idea. That’s because the last thing a seller’s agent wants to hear is a buyer asking a Realtor to reduce commission.

Think about it, the seller’s Realtor just met you, and you’re just one of many potential buyers. Why would you want to start the relationship with the listing agent by asking to take food off their table?

First of all, this will come as a total surprise to them, and many of them won’t even know what you’re talking about. Second, once and if they realize that it’s actually allowed, they will probably be disappointed that you are trying to reduce their commission and the precedent that it might set with other buyers.

Third, if they agree to reduce their commission, then the seller will know and may pressure them to reduce their commission in the future.

Fourth, the seller’s broker may claim, rightfully so, that their brokerage doesn’t allow anything non-standard like this. Perhaps their brokerage does have rules against discounting as they don’t want to haircut the ability of other agents at their brand to charge full-commission.

You’ll also have to understand that seller’s agents will typically never agree to give you a check post-closing from their commission. It’s simply too convoluted. If they agree, they will always simply reduce their commission so no money needs to change hands post-closing.

As a result, it’s entirely conceivable that the listing agent tells you verbally that they’ve agreed to reduce their commission by let’s say 1%, and that it will be reflected as a price decrease of 1%.

However, since you’re not in touch directly with the seller, you have no way to verify that they didn’t simply convince the seller to lower their price by 1% while still keeping the same commission.

Furthermore, since you aren’t privy to the exclusive right to sell listing agreement, you have no clue how much the listing agent is supposed to be making!

How to get a commission rebate from your buyer's agent

In contrast, it’s much more natural to receive a commission rebate from your buyer’s agent, the agent that actually represents you. While some traditional agents will offer some sort of token closing gift like a bottle of wine or a decorative tray, these closing gifts are typically nominal in value when compared to the typical 3% in commission they just earned on your deal.

However, asking your buyer’s agent for commission can be tough, especially since most real estate agents happen to be social acquaintances or friends, and you might hesitate on appearing cheap by asking for something non-standard to take literal food off of your friend’s table.

And even if your agent friend does agree to “take care of you” after closing, it’s usually completely non-binding and you may just as easily find yourself ghosted after closing. In fact, we’ve personally seen instances where traditional buyer’s agents promised to take a client out after closing, only to lamely explain that they had unpaid medical bills for their dog to take care of.

As a result, it’s always smoother and a better experience to sign up for a commission rebate through a brokerage like Hauseit® that specifically offers this service.

Our buyers’ brokers know what they’re in for, and are happy to take on additional business despite the reduced fee. We have a very simple, non-exclusive closing gift agreement where we outline exactly how much in commission we’ll share with you post-closing.

Best of all, there’s no need to apologize to anyone for asking for some of the commission, our agents are happy to work with you and to guide you through the process. Best of all, our agents are some of the most experienced professionals in the industry. Just check out our reviews to see what other customers are saying about us!

Pro Tip: Find out how much you can save on your home purchase with our interactive buyer broker commission rebate calculator!

How does the commission get credited or paid to the buyer?

Buyers have two main options when it comes to receiving their commission rebate. The first and most popular way is to simply wait until your buyer’s broker has cashed and cleared their commission check, after which your buyer’s broker will mail you a check for your portion of the buyer agent commission. Since this is post-closing equity, it’s quite valuable as it could be potentially worth more with leverage were you to buy another property in the future.

The second method is to have the closing attorney credit your portion of the buyer agent commission against your closing costs. The closing agent will simply modify the flow of funds in the closing statement (i.e HUD-1, settlement statement, Closing Disclosure etc.) so that the agreed upon commission amount is used to cover your closing costs.

With this second method, there is no waiting and you reduce your Florida buyer closing costs dollar for dollar on closing day.

The downside of this of course is that you’re reducing costs on a property that you may have bought with substantial leverage, and you miss the opportunity to have that commission rebate available as equity for a future purchase.

Pro Tip: Either you, the attorney or your buyer’s agent can deposit the buyer broker commission check directly into the buyer brokerage’s bank account. If this is done same-day, then the check should clear within 1-2 business days. Remember the great thing about getting mailed a check is that there are no wire transfer fees!

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. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.

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