buyer's commission rebate

bump

I am closing on my co-op on later this week and used Keith Burkhardt, a frequent contributor on this site. I would absolutely recommend him. Getting a refund check, when so many $ are flying out is really welcome. He has a lot of experience in NY RE and definitely got me a better price than I would have gotten on my own. Contact him - you will be happy you did.

http://www.theburkhardtgroup.com/about.php

And if I recall, Keith rebates 66.7%, not just 50%.

I closed just before new years & had a great experience using Brett Mavin from Condo Domain. I got a 50% rebate check after closing. I really thought it was great, but if you want someone to come and hold your hand while you visit open houses, then you're probably better off with a traditional buyer's broker. With that said, if you are already doing your own searches on streeteasy, then you are probably like me and are just looking for someone to help you with comps, negotiation, closing, etc.; then this is a great way to go.

anyone else have experience with this?

Yes, we had an excellent experience with Keith Burkhardt as well. We had been looking for ages and knew exactly what we wanted. We needed Keith to negotiate, close the deal, and manage any problems. I can't praise Keith enough for his knowledge, professionalism, humor, and flexibility in dealing with an offbeat seller and lazy seller's broker. And the best part was that Keith gave us a check at closing. If we ever move again, we will definitely use Keith. Two thumbs up.

and most importantly, the rebate from your buyer agent is tax free as explained by IRS

You are right huntersburg - Keith Burkhardt does rebate from 50% to 66-67%, depending on price of property. I closed yesterday and received my check. He was super knowledgeable, efficient and really easy to work with. His team priced out property, negotiated, put together board package, did walk-through inspection before closing and sat at closing table with me. In fact the seller's broker complemented his firm for their work, and made specific note of the board package. I think many SE folks have used him and recommended him here. That is how I got his name.

Thanks for the nice comments I really appreciate them.

highly recommend keithb. Of course, you should expect to do some legwork on streeteasy.

Commission rebate is illegal unless buyer is holding relaestate license.

I really dont understand this. Brokers have to make a living. If one broker is undercutting others by offering a 50% of 66.7% rebate, does it mean the others are overcharging or he/she is undercharging? Or something else? Are the two actually being paid for same service? Is the rebating broker charging for a service he/she effectively did not render and splitting the gains with the buyer who is in tandem with the deal? Is the buyer effectively claiming brokerage when there was little brokerage indeed just to have access to this 'rebate'? Is the buyer effectively acting as his own broker under cover of a real broker?

Presumably brokerage fees take into account that the input of a broker in each individual case would vary - in some deals/clients there is more work put in than others, and then the fee charged is an average accross the board? So don't these rebating brokers affect the profitability of their colleagues if they offer rebates on those deals that required less input (but the colleagues cant charge more fee for those deals that required above average input)? What is the catch here?

I think the emergence of commission rebate brokers is a natural evolution of the business structure. The internet has put most of the needed information into the hands of the average consumer. The seller's broker is entitled to the same 3% (at least in average NYC transaction) to perform the same services. Consumers can review most of the available inventory and use their time to check out only those properties that meet their needs. They can conduct their own comp search. Why should they have to pay for redundant services? Why should the consumer not be compensated for their time and skill set?

There are cases where some do not want to do their own research, where full service brokers are available to fill that function. Think about the old business model used by brokerage firms. Discount brokerages came in and changed the fee structure. There is room for both in the world. Just business adapting to an ever changing environment.

yss, not true. i checked on this. you can not collect a commission due to real estate brokerage mafia but your broker is free to pay you whatever they want (call it goodwill, they felt generous to pay for your new kitchen) which is not even taxable as it is an adjustment to the cost basis.

Matsui, are you a broker? If you do not get your own broker, the seller's broker keeps the whole commission without giving you any service (so much for price must commensurate with service). RE Brokerage commissions are rigged. I also know of many brokers who did not do a damn thing (neither did the buyer need much) but to show up to collect their 3% commission.

some dishonest brokers always try to spread the rumor that buyer commission rebate is "illegal".

the topic of buyer commission rebate is a good tool to test if a broker is ethical or living on cheating

I am not a broker. I just reckon in any business model fees take into account these variances, that some jobs need more footwork than others. For brokers who only do this rebate business they wont feel the heat as they will have a steady stream of income for doing little in return, mostly in the comfort of their offices. For brokers who focus on the whole service then they must suffer the presence of such brokers if people who have done all their reasearch etc. favor rebate brokers.

We all have our businesses and I suspect if we heard the guy next door was giving back 50 percent of his fee to clients (on whatever basis) we would be a bit concerned. Is a new businesss model but generally ultimately destructive and not sustainable. One day we will look for a proper broker and never find one - it will all be on line and splitting commission...not that we need a broker ;)

Matsui - either you don't understand what a rebate broker does, or you have an agenda. The seller's broker is not affected by emergence of this new breed of broker - they provide the same services to the seller for the same fee. No change. What has changed is the buyer side of the business. Like many other businesses, there are varying degrees of service offered. What is destructive about this? Should you pay for a first class airfare when you are sitting in coach? Do you really believe that the old model - with an antiquated fee structure featuring pronounced disconnect between compensation and value - works in the best interest of the consumer? I don't really get your logic.

new2RE: I don't have a logic. One does not need logic to make a statement, just as there is not much logic in many things you would yourself do or say. I am just trying to understand more - as you rightly state I dont understand what a 'rebate broker does' - frankly I wonder why you even pay them the 50 percent you are paying them. I wonder if I should quit my job and retrain to be a 'rebate broker' as the little I hear sounds very enticing and rewarding to me - have people find their houses to buy, I jump in and then claim half the brokerage fee and give the buyer half. Cool.

I certainly do not have an agenda. One thing is certain is that it cannot be true that "The seller's broker is not affected by emergence of this new breed of broker" - they will be affected ultimately because they will lose business of clients like yourself who have done the leg work and then seek a broker. Several on SE have said that they have gone to this 'new breed of broker'. I would do same myself if I were in such scenario. But that it is good for the day, neither means that it is good for the future, or indeed that it is good at all....

>What is the catch here?

33% of something is better than 100% of nothing.

It's about competition and offering buyers a business model that is aligned with their own level of participation and needs. We focus on a thorough analysis of each deal, the negotiation and board package preparation. This is not for every buyer or agent. But I think it is good for everyone as it offers a choice and creates competition; the engine of free markets and capitalism.

From my side the listing brokers we we work with appreciate our hard work and 100% transparent approach to the buying process. And I have worked on deals with some of the best and biggest in the city. Is everyone happy? Probably not. But I can assure you our clients appreciate our hard work, knowledge of the market and transparency.

That said many buyers/sellers appreciate the service that many of the other highly qualified, professionals can offer them. I love what I do and work and meet many terrific brokers, sellers and buyers. I think it is a small % of people in our profession that give it a bad name. It's no secret many consumers don't like brokers, we can change that attitude. This is good for the sell-side and makes for a smoother transaction.

The Department of Justice has championed buyer rebates and has filed many anti-trust actions against any MLS or other real estate trade group who attempts to limit competition.

Now as a buyer or seller you have a choice; don't you think that is good?

http://www.justice.gov/atr/public/real_estate/rebates.html

Keith Burkhardt

Matsui: I don't think you understand the role of our services. We don't "just jump in and collect 50% of the commission" at the closing. We focus on helping the buyer identify any flaws in a property and assist them in understanding value. It is a combination of my 23 years experience on the street and a quantitative analysis based on sales data in the building and to some extent the neighborhood. Then making adjustments for such things as condition, light, exposure, floor etc.

In my case I then assign a value range based on the emotional and financial components of the particular deal. About 20% of the time I will recommend that a buyer does not purchase at any price.

Most of our clients know where they want to live, but occasionally I will suggest a particular building or location. Yes our clients do the initial research and sorting out potential homes they may bid on. But we also schedule all showings to non public open houses and accompany the buyer.

So it's more of a consulting model, we never push the client to buy, we don't send the client listings; they bring us what they want to purchase. We never ask what they want to pay, we always give our opinion of price first and then compare notes (this is fun).

There is never any pressure and we never feel frustrated that someone is not buying soon enough because of the model. They come to us when they are ready and then we get to work; maybe in a month but in some cases two years.

So we don't just show up and collect a check. And because we are 100% referral based we work extra hard to make sure we offer advice based on the facts of the deal, not just the potential commission.

I wish it were as easy as you state, I have over 15 active buyers at the moment and spend most of the day on my laptop analyzing potential deals for clients and then managing the buying process up until closing. Because of the technology that makes our biz model work, I am often working at 10pm or at dinners as clients want information or have questions at all hours and with the push of a button can fire it off. I feel compelled to answer. In the end it's all about good, honest effective service.

My wife would chuckle if you told her all I do is show up to collect a check...she wishes.

Keith Burkhardt

Keith I am sure you work very hard for you money and that you offer excellent service to your customers. Several on SE say nothing other than good things about you so don't take my comments as personal against you.

You would obviously though sell your pitch and defend your model vigorously. It would be useful, for completeness to hear the contrary view from more traditional brokers.

That said I bet you that it is not your hard work and excellent service that draws clients to you and makes them refer their friends, but rather it is the 50 to 67% rebate check they will get from you at the end of it. If I were to post "I found a new condo to buy, should I get a broker" there would be many (not me though), even some who have used your services, who would swear we don't need a broker to proceed with the deal. So I bet you it is not whatever you offer that is driving people to you. At end of day our decisions generally gravitate to money....

I think it's a combination. I also was a successful broker at a "full service" firm for 19 years. I just set out to build a better mouse trap based on what I was hearing from clients. Of course it is driven by making money, why else does one start a business? But it is also driven by a quality of life and work conditions.

I'ts not about defending it, but explaining how it/I work based on the "just show up and collect a commission" comment.

To each his/her own, but now you have a choice.

You are correct, you absolutely don't need a broker. That is a personal choice based on your particular needs.

>That is a personal choice based on your particular needs.

Ah, personal choice for adults. Good things, the way things used to be.

Ok, now the complainers should get back to blaming everyone else for their problems.

Keith says "Of course it is driven by making money, why else does one start a business?"

Exactly. At end of day it is all about a broker making money, we should not pretend the goal of these new types of brokerage is to provide better service to the clients.

Interestingly, by cutting out the broker in the initial stages of house buying, some buyers will ultimately be worse off as they may discover after getting their 50 percent check that they have some regret or that the deal was not as good as they thought and they may wish they had sought use of a professional from the start. For the seasoned RE buyer definitely is a plus but not sure everyone who uses these services truly gains (or saves) as much as they think they do.

even if "just show up and collect a commission", it's still much better than just saying "this is the door, that is the bathroom......" and collect all 6%, especially in manhattan

Matsui, elsewhere I discussed how the average Manhattan broker at a top firm is involved in just 4 half-sided transactions per year. That's just 2 full-sides transactions per year. IMO, that shows a degree of inefficiency that is remarkable. It takes a certain degree of incompetence to be that inefficient. And stick with it.

So when Keith comes along with a business model that requires a decent level of efficiency, I associate that with a much-higher level of competence. I'll take 1/3rd the effort of a highly-competent person over the full effort of an incompetent "professional" any day. Giving value opinions is not rocket science. All it takes is a little bit of competence and a large amount of fiduciary honesty. It is the latter quality that will screw you in a RE transaction. And with a "give customers what they want, good things will follow" business model like Keith's, I have a much larger degree of confidence in him being honest.

What is the criteria for switching between the posting names caonima, Al_Assad, and Brooks2?

Lots of reasonable advice here, especially the links proving that the DOJ *encourages* these rebates (http://www.justice.gov/atr/public/real_estate/rebates.html) and the fact that they are perfectly legal in NY (see here for the NY-specific overview: http://www.justice.gov/atr/public/real_estate/newyork.html).

So far this thread has mentioned Keith Burkhardt (who seems to have really spearheaded this approach) and Brett Mavin from Condo Domain.

Anyone have others to recommend? Thanks!

It sounds to me like KB earns every penny.

Oh, Al_assad, I forgot that one. No more str33easier or wbottom?

We used Keith when we realized that even though we knew exactly what we wanted, dealing with brokers on our own was frustrating. Keith mad the whole process smoother, so we could concentrate on finding the right place and he could handle the selling brokers. We were very happy with this arrangement, and are now using him again fro my Mom's retirement apartment. If you know what you want and don't need hand-holding, he provides a very useful service.

Big firms frown upon this so it may pay to use a boutique

They must be killing it at the burkhardt group, as evidenced by the quality and quantity of listings on their website.

And the five agents. Business must be booming!

Hey Jim, how's your household help doing?

When is your bar-mitzfah?

Yup, you got me, I'm only 15.

Good of you to finally admit it. It explains a lot. Mazel tov, now fuck off.

You win.

I very recently closed on a condo, and used the Burkhardt Group, but not KeithB himself. My broker is very well known on this site. Not sure if he wants to be named, but I consider him a top RE guru and a really fine human being. I was extraordinarily happy with the service, in every way. Without his help and support, I quite likely would not have made this purchase. I highly recommend my broker at KeithB's firm.
And, of course, was delighted with the rebate checks at closing. Broker is an expert on the UWS and a really fine human being. Wouldst that all brokers were of his moral and ethical character and abundant knowledge.. put hotmail after my name if any further information is desired.

Let me guess,

West81?

LOL. you are a gaon, (look it up, the modern definition).

gaon in gaol

You get what you pay for.

> No more str33easier or wbottom?

How come I get dragged into this ? I wasn't even reading this thread :) Enuff of the idiocy that posters with similar opinions is the same person! .. Oops, forgot to logout of the brooks2 account .. j/k

Thanks very much Gaongaon.

Gaon's deal is an instructive example. The model works well for buyers like Gaon who are naturally hands-on, and who wouldn't delegate the legwork of an apartment search even if they could. Another key to Gaon's success was patience. Gaon had a very clear valuation for the target property, and wasn't going to be bullied off that number. That persistence led to a good deal for Gaon, and meshed well with The Burkhardt Group's no-pressure credo for working with buyers.

Keith sets the tone. The rest of us try to live up to his standard.

I am currently working with Keith B in the purchase of a coop. Knowledgeable. Patient. Professional. Would recommend highly. Looking forward to the commission refund!

demitasse

demitasse As to your question "Anyone have others to recommend? "
A buyer couple who received a rebate on the purchase of their coop, posted this detailed recommendation of their broker Jolie Muss, on her Trulia profile in April. Jolie also has a profile here on Streeteasy.
Thanks for posting those links about rebates from the DOJ!

http://www.trulia.com/profile/jolie/recommendation/

Sprint.

i

I think the emergence of commission rebate brokers is a natural evolution of the business structure. The internet has put most of the needed information into the hands of the average consumer.

Couldn't have said it better myself..

long live KeithB! and I miss Inonada (and w67th, Brooks2, AR, HB, and even CoCo).

Real Estate just like any business is a very creative business. I have been in real estate for 16 years now and first things first-
1. The term broker is loosely applied by those outside the industry. People tend to confuse an agent license with a broker license. An agent (sales person or associate broker) hangs his license under a broker and every time he or she makes a deal has to split the commission with the principal broker.
2. Look at well-established firms that have 300-400 agents. The principal broker is “one” and the rest of the 300-400 agents hang their license with the principal broker.
3. Hope you are clear and now since that’s out of the way the temptation of an agent working with a large firm to give his buyer or seller something back is kind of rare because the principal broker may not allow that. And secondly if it did, the money on the table isn’t significant enough because the agent has to slice and dice the commission with the principal broker.
4. At a $1 Million buy let’s assume the agent gets $30K (3%). From this $30K let’s further assume his commission split with the principal broker is 40/60. He will give $12K to principal broker and take home the rest $18K.
5. On the other hand if you deal directly with a principal broker he or she may be more inclined to pass on the savings to you as the buyer or seller and most importantly offering the same representation that you will get working with an agent at a large firm.
6. What I find interesting is if another agent located outside the city or not specializing in that particular neighborhood were to send a buyer to a large company they are happy to give 25% referral fee. On a $30K commission the referring party will get $7500 and the rest $22,500 will get split 40/60. So why do they offer resistance when a buyer wants the commission rebate?
7. Because most brokerage houses do not want the consumer to know that the US Department of Justice as well as the NY Department of State, allows brokers to rebate a portion of their commissions to the buyer or seller. The reason the US DOJ allows this is to enable smaller firms to compete with larger firm and this in return is a win-win for the consumer.
8. Every buyer should seek to be professionally represented by a broker. There is absolutely nothing to be gained when you go direct to the seller’s agent. As buyers you are not getting a discount or saving the commission. The seller’s agent wants the best price for the seller and you as the buyer want to pay the least you possibly can. Do you know of an agent that can simultaneously fight for both those outcomes? Read the NYS mandated disclosure form clearly and have a good understanding of the form. It was implemented to protect you, the public. Imagine if you were a plaintiff in a lawsuit. Would you hire the same attorney who represents the defendant?
9. I specialize in buyer & seller representation and I am happy to help. Call me at 212-500-0899.

re point 8 - it listing is FSBO, buyer absolutely saves by going directly to seller. I sold a property FSBO directly to unrepresented buyer for 5% less than what I would have sold it for had a broker been involved.

I note that in my FSBO experience, I was very firm with agents I interviewed about what I wanted to net and no agent was confident in their ability to get me my price so I didn't list house and sold it myself through word of mouth. Shows that agents' professional assessment of property is not the last word.

Where X was sales price, my buyer would not have purchased property at 1.05x, and I would not have sold property at .95x, so agents were right not to take in listing; property would have just sat, so final note is that agents' assessment of propert was accurate - just not the end of the story.

Come back in about 24 hours and reread your posts.

@fc - hmm, I see your point. But, on other notes, I cringe for each broker posting trying to rehabilitate a certain building on east 51st street. The post that most recently claims the sponsor (Sponsor) lives in the building is partially correct, or at least was when I rented there in 2011 - he was there enough to terrify the staff, but, as far as his legally residing there? Well, let's just say I have a copy of a deposition from one of the many litigations in which he was involved last time I checked (in 2012) wherein he is quite squirrelly about his legal residence. In that deposition he claims to live in Florida, and when pressed, he starts saying something about New York State and his intention to spend at least 180 days in Florida in 2012, as he "possibly" did in 2011, before his attorney interrupts and the parties go off the record. Does not take a genius to figure out whether someone is trying to avoid New York taxes. I thought you might appreciate that tidbit. The fact that the brokers are trying so hard to sell the building makes me think that the market may have finally caught up with the guy. In any event, I can sleep at night knowing that I have put relevant information out there for anyone who comes to Streeteasy looking for information on the building. If others who have positive experiences with the building want to post, good for them; I am happy for anyone who has had a positive experience there or anywhere else.

That's nice.
Even nicer for the very few who are willing to take the time, effort and spend tens/hundreds of thousands of their own dollars to put relevant information out there by way of actually taking legal action and/or responding to unlawful actions.
The sponsor is on the board and the board is controlled by the sponsor.
Talk is cheap. Defending your rights in court is expensive and although it usually doesn't result in being compensated for legal fees in return nor any personal enrichment, it does result in changing the course of the unlawful procedures/ status quo, for the benefit of the shareholders/owners/residents who still are involved in the building after you have moved on.

@Edwinnyc - Filing one more complaint against that guy wouldn't have done anything; anyone who does business with him with all the information that is already publicly available via previously filed litigations deserves whatever they get, and yes, that includes me. We all know to wear our seatbelts, but sometimes we don't, and if we sustain an injury that could have been avoided through basic care, my personal feeling is that it is best not to burden the courts with it. Were I not an attorney, I might be a more sympathetic "victim," but given my background, I am not a victim, but rather an individual who was careless.

O.K.
but as you have stated before: not every person "who does business with (that guy), with all the information already publicly available via previously filed litigations ..."
In the case of there being no previously filed litigation, due to the circumstances I described in my comment:
A person(s) is then caught in the web of deceit and must either fight (or not having the resources/time/ money /willing to engage in the good fight) , must cut and run.
The ( board/Sponsor) will engage an owner/resident, by way of a systematic attack and they will burden the courts with it. There is no other way for the innocent to escape, except to either fight or run.
If the victim runs, there is no justice in case-law to prevent the same, from victimizing those who can't/won't fight and the circle remains unbroken. Not everybody is careless under those circumstances.
A renter can pack-up and get out of there. An owner is not in the same position.
The court doesn't care about what comments are posted here. Each victim is on their own, with the onus of providing evidence to the court. That fight is expensive and very few are willing to break that circle which burdens the court system.

lightbulbs and headlight-diving. Very illuminating.

A good firm that will help you get 50% of the buyer agent commission rebated to you at closing is www.hauseit.com/home-buyer-cash-back - I recommend those guys to all my friends. They'll pair you with a top local agent that will help you with your home search as well. Best of all, it will be a real agent who does normal business day to day, so they'll have a stellar reputation and can negotiate on your behalf without any stigma :-)

Hauseit is not a licensed broker but a marketing service for local agents, interesting. I wonder how they get paid since they cannot share in the commission received from transactions. They are also are not members of any MLS or REBNY here in NYC. I'm guessing agents pay them a fee to get leads developed from their site?

http://www.hauseit.com/terms-of-user/

Keith Burkhardt
The Burkhardt Group

Can anyone that's used Hauseit tell me which REBNY broker you eventually used? Can you also let me know how many brokers Hauseit originally gave you to choose from? Thanks

Gave me one and I used them.

There are lots of rebate brokers out there; some likely better than others. I spoke to a few before I decided to work with Dan Gotlieb from Digs Realty (www.digsrealtynyc.com). I felt good about him during our initial conversation, and that feeling continued throughout the ( I highly recommend him. My friends who have used him also have nothing but great things to say.

I have never seen a buyers broker on this thread that recorded the rebate on the closing disclosure which used to be the Hud-1 statement. If this rebate and the amount does not appear on the closing disclosure then it is not tax free. I am a real estate broker but also a mortgage broker and sometimes have arranged financing for the buyer. I have also co brokered a loan.
My last client who i arranged financing thought his rebate was tax free. Since it wasn't entered on the closing disclosure, i wish him luck since his rebate is not in fact tax free.

We provide buyers with a rebate of 2/3 or our commission and we hear this question all of the time. Everyone should consult their tax professional to be sure what effect a rebate has, but Inman ran an article on this several years ago (https://www.inman.com/2011/05/06/tax-practices-real-estate-commissions-rebates/). “A common question many brokers and buyers have is whether such rebates are taxable income that must be reported to the IRS on Form 1099-MISC. The answer is no.” The article notes that rebates are generally used as an adjustment to the purchase price for tax purposes.

The IRS posted a ruling (https://www.irs.gov/pub/irs-wd/0721013.pdf) that specifically says, “The buyer’s agency agreement permits the purchaser to use the payment towards the purchaser’s down payment, closing costs, and/or a reduction in purchase price.”

Russell Sinclair
Prevu Real Estate
https://www.prevuapp.com/

Thanks Sinklair. What if the buyer is also a broker? Is the rebate then taxable as regular income?

It depends on the situation. I'd highly recommend talking to a tax accountant in that case.

Ximon,
I think the answer to that is that it depends on how the rebate is applied. If it has taken as an adjustment to purchase price, then you eventually end up paying capital gains tax on that amount when you sell it because of a lower adjusted basis. But if it isn't taken as an adjustment to purchase price... Well I think the IRS would see it as a tax avoidance scheme. You can alter when you pay taxes on it, and even the type of taxes you pay on it, but if you try to avoid paying taxes on it all together...

30, So as a broker buying for yourself, you can declare the commission received as cost adjustment and pay capital gains at the time of sale? Without knowing IRS stand on it, it makes general sense to me as earned income is for performing service for someone else.

I'm not saying you can receive the commission and then declare it that way, I'm saying it has to be designated that way in the settlement.

Thank you.

The HUD-1 statement does not exist anymore. It's been replaced by the closing disclosure which must be presented 3 days before close.

With all of this said, I would be highly careful about working with a "rebate" broker or getting a kickback of some sort at close.

If I was the listing agent, I would first need to clear it by our legal team and my manager, and then also the seller. I would have to ask on behalf of the seller to increase our list price by x% (whatever the "rebate") since the seller is effectively paying the commission to the buyer.

Or like every other broker I know, we'd probably just ignore and not return their phone call.

April 20, 2015

Dear participant in New York’s real estate industry:

I am writing to alert you to a recent change in New York State’s Real Property Law that was strongly supported by my office. This law has the potential to breathe new life into competition in the residential real estate brokerage industry, to the benefit of all New Yorkers. I urge you take advantage of this law and help reinvigorate price competition among real estate brokers in New York.

In December, a statute was signed into law amending Section 442 of the New York Real Property Law to make it completely clear that it is lawful for a broker to pass through, or “rebate,” part of his or her commission to the client. This legislation arose out of an investigation by my office into competition in the residential real estate brokerage industry. My office worked together with the New York Department of State, the New York State Association of Realtors, and others in the industry to initiate the clarifying legislation.

As you know, for most residential real estate sales in New York State, including New York City, the seller’s broker is usually compensated by receiving a contractually set commission from the seller. The buyer’s broker, however, is not typically paid by the buyer; he or she instead receives a fraction (often half) of the seller’s broker’s commission. Due to this payment structure, often the best way for a buyer’s broker to compete on price is to offer to rebate part of his or her commission to the buyer. Such buyer rebates are legal in most states, including New York. But until recently, some people in the industry may have read Section 442 to suggest that this type of rebating was not permitted in New York. As of December’s legislative fix, there is no room for debate: commission rebating in New York State is legal.

Such rebating is also procompetitive and good for consumers. One reason my office helped initiate this legislative change was because we were concerned that confusion over the legality of rebating may be hindering efforts of real estate brokers to employ more innovative, consumer-friendly business models. For example, the widespread use of sophisticated real-estate search websites now allows buyer-side brokers to offer more limited-service, lower-fee models, under which clients do more of their own legwork when searching for properties. Brokers adopting such models can offer lower commissions (by rebating) and, in principle, may also be able to serve a larger number of clients.

I encourage all real estate brokers and salespersons in New York to consider enhancing the choices available to real estate buyers by offering lower commissions (by means of rebates) to some or all of your clients. I also emphasize that my office will investigate any allegations of boycotting or discrimination against brokers engaged in rebating or other lawful discounting practices. Finally, I urge consumers and other buyers of real estate in New York to take note of your right to bargain with your broker for a lower commission.

For the text of Section 442 highlighting the recent amendment, and additional information about competition in the real estate industry in New York, see my office’s Antitrust Bureau webpage at here.

Sincerely,

Eric T. Schneiderman
Attorney General
State of New York

Finally, I urge consumers and other buyers of real estate in New York to take note of your right to bargain with your broker for a lower commission........

Excellent and fair competition. It's really about time.

Hope attorney general is reading this thread and asking Streeteasy for identity of those who are calling rebates illegal.

My first instinct would be to Google who you are. Then, seeing as you are in fact a one man bucket shop offering this gimmick, I would delete your inquiry or add it to my junk filters.

We've honestly had enough of you mega trolls on these forums, calling folks who make an honest living in the business, hustling day in and day out, over paid and "wannabes."

You have got to be kidding. No one I know would pick up your calls to begin with, but definitely not now!

Luxury broker, Any one who discloses their identity on this board knows who I am. You disclose who you are and I am happy to disclose who I am. You wouldn’t need to google. I have nothing to hide like you do due to your claims of illegal tactics which are a violation of your fiduciary responsibility to your sellers, if you have any.

It really took awhile given how much time you have spent on your couch posting nonsense on internet boards, but thanks for the idea, I figured out who you are.

300_mercer is either Keith Burkhardt or possibly Realdirect. Ultimately, you give away who you are by not being able to resist promoting yourself.

It makes sense why you're so concerned now about us (the rest of the real estate community) not picking up your calls! Let's share the truth!

Sigh. @luxury broker, I have met Keith B., RealDirect, (or at least Doug P., the sponsoring broker there) and 300_Mercer, and they are all different people.

ali r.

Lol. Obviously I'm Keith Burkhart of the Burkhart group, and Doug, who is also an attorney and founder realdirect is easy enough to identify.

I personally know 300 as I've sold him several properties.

And thank you Ali for clearing all that up!

Keith Burkhardt
Here I am www.theburkhardtgroup.com

Thank you

Ali has represented me in buying a property too. I am concerned about consumers being treated unfairly and illegally by people like luxurybroker. It is all about consumer choice. Brokers are free to charge what they like for service. There are customers for all. For example, I am currently using a large firm for a property sale. That does not mean I will not use some one with a lower commission in the future or sell it myself. The large firm I am using is very happy to work with brokers offering rebate as they just want do the best job for their seller. Keith and my big firm selling broker have done many transactions together. Of course they may have some rotten apples like luxury broker.

Don't get me wrong. I am happy to have more brokers commenting on these threads -- it's a lovely virtual coffeehouse, and I feel that more is always merrier. But some people sign their posts, and some people don't, and that gets a bit confusing.
ali r. {upstairs realty}