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photo credit: The Consumerist

PC, a home buyer from San Francisco, California, asked last weeks most viewed question on Trulia Voices - Buyer’s Rebate? PC wants to learn how agents determine how much of a rebate they offer and what the “typical” rebate offered is. With 30 comments thus far, lets see what our community thought?

Thoughts from our Trulia Voices Real Estate Community

Steve Ornellas is a real estate agent with Steven Anthony Real Estate & Financial Svcs in Fremont, California who said, ” Hi Pc, what is typical is that Buyer’s Agents do not rebate commissions; at least those that offer full service. Why? Well, would you choose a heart surgeon based on his rebate? Perhaps a stretch in comparing two professions, however, useful to make a point.”

Lance King, the Founder and Managing Broker for Fixed Rate Properties, Inc. in San Francisco, California said, ” First, there is no “standard” metric for a rebate program. Second, you can ask an agent for whatever you want, but it is the Managing Broker who makes the decision to cut commissions, not the agent. Most companies who do not have a rebate program in place are very reluctant to do this…….”

Jed Lane is a real estate agent with Coldwell Banker and publisher of Fog City Guide in San Francisco, California who said, “There is no such thing as a buyers rebate. Any agent that can’t negotiate their own income successfully is not capable and should not be allowed to represent the principal as a fiduciary. If a buyer or seller wants to work with a fee for service model so that they can pick and choose from a menu what services they want or do not want that is a vastly different business model.

If you expect an agent to be your fiduciary and deliver every aspect of agency then negotiate up front. And I say again that any agent that you can best in straight up negotiation you shouldn’t want as you fiduciary. A case in point. I saved my clients $55,000 in negotiation and when asked why I responded simply it’s my job. Cost me $1,650 but I represent the principal not myself. So think about how good I’d be negotiating for your money when I can’t negotiate for my own.

Simple answer to your question $0.”

Nova, a home buyer in Sunnyvale, California said, “50% is the least you can get with a very good realtor. Just post a message here on trulia that you are looking for such an agent and many people who are saying it’s not possible will rush to reply you.

Not only is the market tough right now, but also things have changed quite a log. Most of the info is online and buyer does (and would better do) most of the work finding house himself.”

Jackie Cuneo is a real estate agent with Zephyr Real Estate in the Dolores Park area in California said, “If you’re purchasing your first home for $600,000, would you rather have:  An inexperienced agent who will give you 50% of 2.5% buyer’s commission = $7500 one time or An experienced agent who can successfully negotiate a lower price, seller credit, and/or match you with a mortgage broker who will aggressively hunt for a great rate for you?

5% price savings on purchase (common these days) = $30,000 + interest savings on this loan $$ or 3% seller credit toward closing costs (allowed by nearly all lenders) = $18,000 and/or a 1/4 percent lower rate on a $480,000 loan = $100 per month of interest saved.

Of course, if you have a relative in the business who will rebate some or all of his/her commission, that’s great. If they’re skilled enough to negotiate some or all of the other concessions mentioned here, even better.”

My Thoughts

Most states permit real estate rebates - it doesn’t mean that all agents are offering them. What’s important to keep in mind is the quality of service, representation and negotiation that your agent can provide you. A new agent who is just getting his feet wet in the business could offer you x amount of a rebate just to get his pipeline going. Whereas a seasoned real estate agent who has accumulated the knowledge and experience to become a great negotiator may not offer a rebate. Their value lies in their negotiation skills and deep understanding of how to make a deal. They may end up negotiating a better deal than and agent who just offers a rebate. Can consumers get the best of both worlds? Sure. You just have to negotiate. As some have said, you get what you pay for.

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