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 at https://www.irs.gov/pub/irs-wd/0721013.pdf

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 at https://dos.ny.gov/real-estate-broker, 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?

You can expect only a simple agreement to be sent to you for e-signature detailing the terms of your buyer agent commission rebate. This agreement is non-exclusive in nature, and serves to protect you by clarifying the terms of your payment. All brokers in NYC are also required to send you various state mandated disclosure forms such as the NY Agency Disclosure Form and the NYS Fair Housing and Anti-Discrimination Disclosure Form. These government mandated disclosure forms are not contracts and you are not required to sign many of them.

Are there any hidden fees?

There are no hidden fees. In fact, you don’t owe us or our partner brokers anything at all because buyer’s agents typically get paid from a split of the total listing commission, which is covered by the seller. This means the seller pays both the listing and buyer’s agent commissions. If you forgo working with a buyer’s agent, the listing agent usually keeps the entire commission, so neither you nor the seller save any money. If the seller isn’t paying a buyer agent commission, we won’t be able to provide you with a commission rebate. You can either submit an offer directly to the listing agent, or if you’d still like us to represent you as your buyer’s agent, we can work out a reasonable fee that you would pay for our services. Keep in mind that the buyer agent commission varies by listing, and commissions are not set by law or any Realtor® association or MLS and are fully negotiable.