Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
In most cases, NYC real estate agents do not give commission rebates. Their 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. There’s also a fear that if they gave an inch, buyers would take a foot. 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 recently heard about commission rebates, you might feel as though 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 in nature? Well, buyers, this one’s for you. You can finally get in on some of that extra cash through a home buyer rebate. Free money sounds great, right? 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 so popular.
Historically, the average NYC real estate commission would be around 6%. This commission would typically be whacked up 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 are now finding 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. They did a lot more legwork. However, nowadays, most home buyers are finding 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 an opportunity in the market and offer buyers who are willing to do some online searching for properties a commission rebate. This saves the buyer’s agent time and gives buyers a substantial financial incentive to work with them.
That being said, purchasing a home is a critical decision. Therefore the majority of buyers will benefit dramatically from having an experienced agent representing 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 we do prospecting for leads or cold-calling.
This contrasts with the typical agent who spends as much as 80% of their time simply trying to find customers. That’s why it’s important to with a talented, forward-thinking broker like NestApple. We are making buying and selling a home more affordable by offering rebates to buyers and low commissions to sellers.
The simple truth is that many agents at traditional firms would be open to rebates if they would better understand the dynamics. After all, agents want to serve their customers better and make more money. Therefore, offering a commission rebate is a great way to make deals more efficient.
And there are plenty of stories of traditional brokers switching to the rebate model. They see their business explode. Unfortunately, their brokerages are threatened by rebates. They find it hard to turn a 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 would allow some agents to offer rebates. The top-producers likely wouldn’t. But then their customers would potentially find out that other firm agents are offering rebates. 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.
You can always negotiate with your real estate broker. Whether it’s their commission or the size of a rebate, but most traditional NYC brokerage firms will not offer any rebate. This is due to their fear that if they were to provide even a tiny rebate, buyers would attempt to negotiate larger rebates. Essentially, if a brokerage is not known to offer commission rebates, it’s improbable that you 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 found out about commission rebates and wish to receive up to two-thirds of the buyer brokers commission as cash-back, give NestApple a call, and we’d be happy to help.