Buyer's broker rebates

Great question Doug, I hear it's becoming quite more mainstream. Just yesterday a buyer told me that his friend is paying someone $400 to list their home (could have been Hauseit, he didn't remember the name), and this same buyer mentioned that someone had already offered them a rebate. Guess reduced commissions are becoming more mainstream.

I think the bigger brokerages are going to continue to prohibit rebates by their agents. They are very corporate and don't want anything that might hinder their full-service reputations. The last thing they want is to have their agents running around advertising rebates. They have thousands of agents who know even more people, there are bound to be buyers who are fine with no rebate but just free service.

Since I got involved doing rebates, the niche has gotten more crowded, but it is still far from mainstream. And even though more companies are offering rebates, the vast majority of them do not offer rebates of up to 2% of the purchase price, as we do at Digs. Most are 1% or less and do not provide full-service representation. If it does continue to gain traction in the marketplace, given the saturation by the larger brokerage firms, it will take a very long time to make a significant dent, so I think for the foreseeable future, rebates will still be a niche area of the brokerage industry offered by a small minority of brokers.

Regarding your prior agent relationship, if you enjoyed working with your agent and trust him/her, but you really want a rebate, you should ask them if they would give you one. If they won’t give you one then you should evaluate your priorities and make a decision based on what you feel comfortable doing. If you didn’t like your prior agent, then it’s a no-brainer – people change buyer agents all the time, so no, it is not sketchy to change agents. You definitely should not be working on such an important purchase with someone you don’t trust, and many of my clients have come to me after having a bad experience with a lousy agent.

Dan Gotlieb
Digs Realty Group
www.digsrealtynyc.com

I started out trying to create an alternative model with travel service companies, Blue Nile and financial services companies in mind. All used technology to their advantage as well as taking the temperature of consumers;what they want and what they expect. We have chosen to work solely with buyers (after much thought and debate) it works well for us.

The last big company offering rebates and reduced listings commissions is Redfin, Zip Realty was bought by Realogy and the rebates were discontinued. I think it is difficult for a large company to offer them and make money. After 24 years in the real estate business I. The Burkhardt Group was born out of the comments of posters here on Streeteasy. We are coming up on 10 years and I love what we do and can offer our clients. We run a very efficient business with very low overhead. We have always offered 50-67% of the commission we receive back to our clients, the scale is based on the purchase price. It is also still a social business and the buyer has to click with the broker they are working with. A home is a uniquely emotional as well as financial purchase, even my toughest 'this is just a numbers game for me' clients get a bit weak in the knees after connecting with home he really loves (and then is out bid on).

It's healthy to have alternatives and create competitiveness. Tiffany's is not going out of business because of Blue Nile. However they may have to compete better and the consumer will decide which model they prefer. I really love what I have created and the fact it fills a niche that was there, that people wanted. It's not just about the rebate, it's about the process that we have created.

Keith Burkhardt
The Burkhardt Group
http://www.theburkhardtgroup.com/testimonials

Thanks again to everyone here on Streeteasy! I really appreciate all the kind words and referrals!!

Very satisfying to finally see innovative business models breaking the brokerage stranglehold on the real estate market. Word is certainly catching on about the discount models and the momentum is building.