Why Do NYC Real Estate Agents Not Give Commission Rebates
Go Back To Previous PageIn most cases, NYC real estate agents do not give commission rebates. Their New York and Westchester brokerages have convinced them it’s not worth working with rebate customers. Also, their firm would not approve any rebate. The average salary of a real estate agent in NYC is pretty low, and there’s also a fear that buyers would take a foot if they gave an inch.
That’s certainly the case amongst the biggest real estate brokerages in NYC.
If you’re buying a home in NYC and are working with a traditional agent but have recently heard about commission rebates, you might feel you aren’t getting the same incentives as other buyers when they close a deal. After all, who doesn’t want to be offered more incentives?
Especially if those incentives are financial, well, buyers, this one’s for you. You can finally get in on extra cash with a homebuyer rebate; free money sounds great.
Of course, it does.
With a home buyer rebate or buyer agent commission rebate, you get a portion of your agent’s commission after the deal closes on the property. Extra money for you and a way for an agent to get more clients — it’s a win-win. So why exactly don’t more NYC real estate agents offer rebates? Before we get into it, let’s explain why rebates are becoming popular.
The Internet Has Transformed Real Estate, but Traditional NYC Real Estate Agents Refuse to Change
Historically, the average NYC real estate commission would be around 6%, and this commission would typically be split between the listing agent and the buyer agent. But since the advent of the internet, consumer behavior has changed dramatically.
Marketing a home to massive audiences is easier and faster than ever before. This means less work for listing agents, and buyers now find their properties online. This represents a dramatic change from the late 1990s, when most buyers found their property with the help of a real estate agent.
Back then, buyer agents acted as gatekeepers to real estate listings and did much more legwork. However, nowadays, most home buyers find their
homes online without the help of an agent.
This means that most real estate agents, especially buyer agents, are doing less work than ever but collecting the same high fees. And this is precisely where commission rebate agents come in. They’ve identified a market opportunity and offer buyers willing to search for properties an online commission rebate. This saves the buyer’s agent time and gives buyers a substantial financial incentive to work with them.
The Myth Traditional NYC Real Estate Agents Spin
Rebates are legal as a percentage of the sale price, and the Department of Justice authorizes them.
That said, purchasing a home is critical; therefore, most buyers will benefit greatly from having an experienced agent represent their interests. Luckily, most real estate brokers who offer commission rebates are precisely that. At NestApple, our agents close more deals in the average month than the typical agent at a big NYC firm closes in a year.
We are more in tune with the market. In other words, we have extensive negotiating experience to save you tens or even hundreds of thousands of dollars.
And the reason is that deals with rebate buyers are more efficient. We spend more time viewing properties and negotiating deals than prospecting for leads or cold-calling.
We don’t do any cold calling!
This contrasts with the typical agent, who spends up to 80% of their time finding customers. That’s why working with a talented, forward-thinking broker like NestApple is essential. We are making buying and selling a home more affordable by offering rebates to buyers and low commissions to sellers.
Traditional Brokerages in New York Are Unable to Change
The simple truth is that many agents at traditional firms would be open to rebates if they better understood the dynamics. After all, 
agents want to serve their customers better and make more money; therefore, offering a portion of their commission as a rebate is a great way to make deals more efficient.
And plenty of stories of full-service brokers switching to the rebate model exist. They see their business explode. Unfortunately, their brokerages are threatened by rebates.
They find it hard to profit due to the smaller margins they’d get if they offered commission rebates.
Rebates would also create problems for their top-producing agents. Those have loyal customer bases willing to work with them without a rebate.
Just imagine what would happen if they allowed some agents to offer rebates. The top producers likely wouldn’t. But then their customers would discover that other firm agents are offering rebates, and the optics would be terrible. The simple fact is that the significant 2/3 commission rebates offered by NestApple and other rebate firms are an existential threat to traditional brokerages.
Can You Negotiate a Commission Rebate?
You can always negotiate with your real estate broker. Whether it’s their commission or the rebate size, most traditional NYC brokerage firms
will not offer any rebate. This is due to their fear that buyers would attempt to negotiate for larger rebates if they were to offer even a small one. Essentially, if a brokerage is not known to offer commission rebates, it’s improbable that you will get a rebate.
Lastly, in New York City, it’s the buyer’s choice who they want to work with, and you can always switch brokers. So if you recently learned about commission rebates and wish to receive up to two-thirds of the buyer broker’s commission as cash back, call NestApple, and we’d be happy to help.
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
