To rebate or not to rebate….that is the question.

 Here's an interesting dilemma for you. Let me know how you would handle it. I have an appointment with one of my long time customers tomorrow to write a deal on a new construction townhouse. This particular buyer is the daughter of one of my investors. Over the last couple of years I have assisted this investor in the selling and buying of about 10 properties, including a couple of duplexes he is in the process of purchasing right now where my investor is paying my $6,000 fee.

This particular builder is paying me a x% co-broke plus a $10,000 bonus on the property we are placing under contract tomorrow. What I am wanting to do is rebate the $10,000 bonus to my buyer. I know what your thinking…"Broker Bryant why would you do that?" Well, the property that's being purchased is priced at $150,000. I feel that an almost $15,000 commission, just for taking my buyer into the model, is outrageous. Also, since these are friends and long time customers of mine, I feel the rebate is the right thing to do. The buyer is a young single girl and could use the rebate to furnish her first home.

Here's the dilemma. In Florida, I can legally rebate a portion of my commission, as long as it is disclosed to all parties that have an interest in the contract i.e. buyer, seller, agents and lender. Notice it says disclosed not approved. However, this particular builder has a clause in their commission agreement that I will NOT rebate any portion of my commission to the buyer. If I do they can refuse to pay me or ask me to repay the commission.

Due to this clause, I cannot place the rebate on the HUD1, as I would normally do. If I rebate it after closing, even though it's legal, I would be breaching my commission agreement with the builder and they could sue me.

My question is: How would you handle this? If it helps, I do intend to give my buyer the $10,000. I also intend it to be done legally and without breaking my agreement to the builder.

What am I going to do? Remember I am the Broker so don't I need anyone's permission.

I hope you enjoy my little test today. Now get out of the box and see if you can figure out what I'm going to do. I'll be back later to give you my decision. Have at it!!

Picture compliments of Danny Smith. Danny…..come home we miss you!!!

All content copyright © 2007 – Broker Bryant Real Estate Ramblings

Leave a Reply

Your email address will not be published. Required fields are marked *