September 4, 2019
Commission rebates are a small but rapidly growing part of the NYC real estate market. As more buyers get their rebates and tell their friends, buyer awareness is only increasing. But as a relatively new concept, there is also a lot of misinformation about commission rebates. We’ve already answered common questions like how do they work and are they legal but we thought it was time to address another in depth – why does Yoreevo openly offer commission rebates?
Table of Contents:
Any agent at any brokerage can offer a commission rebate. Whether they will, of course, is a whole other story. We’re willing to bet that most successful agents in NYC have given a commission rebate at some point. Not in the form of a check but as a reduced commission.
For example, say Buyer Joe has submitted his best offer of $895,000 but Seller Jane won’t accept anything less than $900,000. One or both agents may reduce their commission to bridge that gap. This is effectively a commission rebate and happens all the time.
Yoreevo, on the other hand, tells all buyers we would be happy to get them a commission rebate. No haggling, no preferential treatment, no deal impasse required. Anyone can go on our website and see how it works. This is what we mean by openly offering commission rebates.
Some market participants would like you to believe openly advertising commission rebates is a terrible idea. Their argument is if the listing agent knows you are receiving a rebate, your deal will be compromised.
How or why exactly? We’re not so sure. The position starts to break down from there. Presumably the listing agent will be upset? We don’t understand why a listing agent would be concerned about where a commission goes after it is paid.
It's also argued that the seller will get upset about "paying" the buyer a commission. Putting aside the likelihood of a seller knowing, we're pretty sure all sellers would prefer lower transaction costs and buyers with more financial firepower.
Listing agents don’t care whatsoever if the buyer receives a commission rebate. If it doesn’t affect them, why would they? The co-broke paid is the same regardless of whether the buyer is represented by Yoreevo or any other broker.
Yoreevo has worked seamlessly with virtually every major NYC brokerage you can think of and not one listing agent has gotten upset. Many thought it was an interesting model and one even gave us a referral! She wanted to list for a friend as a favor but her firm had a strict minimum commission. She put us in touch and now the successful listing is in contract!
It's a similar story with sellers. We generally don't speak with the seller on purchase transactions but have had some ask about our model. They want to save money too after all!
If you need more proof that nobody gets upset by commission rebates, look at Redfin. It's a massive publicly traded real estate broker. Advertising commission rebates is going just fine for them.
Openly offering commission rebates also makes the process much simpler and smoother. By working with Yoreevo, you know who you’re dealing with, what you’re getting and how much you will be saving. And perhaps most importantly, there’s no haggling!
Some market participants “discreetly” offer commission rebates based on the questionable argument above. They’ll refer you to brokers who only sometimes offer commission rebates.
Think about what that means for a second.
The broker will give you a rebate but only because you asked. If you didn't, they'd keep the full commission. That doesn’t exactly seem fair.
It also doesn’t really make sense. Giving commission rebates is a huge no-no but brokers will allow their agents to participate in a commission rebate platform?
We’d also have some questions like -
Yoreevo wants to dramatically improve the real estate brokerage industry for buyers, sellers and tenants and a big part of that is transparency. We firmly believe in commission rebates, so much so that we want you to immediately associate them with Yoreevo.
If you can’t find an answer on our website or simply don’t want to read, just give us a call or contact us!