FAQ

Are commission rebates taxable?

The IRS has issued an opinion letter stating that closing credits and commission incentives provided by real estate brokers are generally not taxable. As a result, you should not expect a 1099 to be issued to you as your closing gift will generally be treated as a concession on price, and thus a reduction of your cost basis. Please consult your tax adviser for more information. You can also view the specific IRS rule we referenced here.

Is it legal to receive part of the commission?

Yes, closing credits and incentives to buyers are legal in 40 states including New York and Florida. It’s legal for a buyer’s agent to offer a portion of their commission as an incentive, and it’s legal for buyers to receive such an incentive. In fact, former New York State Attorney General Eric T. Schneiderman released an open letter to the real estate community on April 20th, 2015 urging all parties to take advantage of such home buyer closing credit programs and incentives.

In addition to the letter referenced above, The New York Department of State, Division of Licensing Services also speaks to the legality of rebates on this page, a excerpt of which is reproduced below:

Can brokers pay rebates to customers and offer other incentives?

The payment of cash or offering an incentive to encourage a consumer to do business with a broker is permitted. The Real Property Law prohibits brokers from sharing commissions with unlicensed individuals. It is often misinterpreted as prohibiting the payment of cash or offering another business generating incentive to a consumer. This law prohibits a broker from sharing a commission as compensation for activity that would require a real estate license.

Ten states currently ban commission incentives offered by the buyer’s agent. Nine of these states have a full ban in effect due to strong real estate broker lobbying efforts: Alabama, Alaska, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee. The tenth state, Iowa, prohibits any such incentives when there are two or more real estate brokers on a transaction.

Will I have a full-service buyer's agent?

Yes. Our experienced brokers will be there for you throughout your search, offer, contract and closing process. If you’re busy, our partner brokers can search for listings and schedule viewings on behalf, and even put together showing tours for you when you’re free for a day.

Do I need to sign an agreement?

In markets like New York and Florida, buyers are not typically expected to sign an exclusivity agreement. As a result, you can expect only a simple agreement to be sent to you for e-signature detailing the terms of your commission rebate. This agreement is non-exclusive in nature, and serves to protect you by clarifying the terms of your payment.
Brokers are also required to send you various state mandated disclosure forms such as the NY Agency Disclosure Form, the NY Fair Housing Disclosure Form and the Lead-Based Paint Disclosure Form. These government mandated disclosure forms are not contracts and you are not required to sign many of them.
In a similar vein, brokers may also send you other disclosure forms related to current events such as the COVID-19 Disclosure Form which you are similarly not required to sign.

Are there any hidden fees?

No. You don’t owe us or our partner brokers anything because buyers’ agents get paid from a split of the built in listing commission. As a result, it is the seller who pays the agents on both sides. If you don’t take advantage of your right to buyer representation, then the listing agent keeps both sides of the commission.