1. Are rebate commissions legal in NY?
Yes. Sharing commissions with buyers and tenants is legal. The New York State Department of State has held that New York real estate brokers may share their commission with a purchaser, seller, landlord, or tenant. Also, commission rebates are legal in 40 states, including the State of New York. Therefore, the law allows in these States both for an agent to offer and for a buyer or tenant to accept a commission rebate in conjunction with the purchase or rental of residential real estate. Also, in 2015, Attorney General Eric T. Schneiderman issued an open letter confirming that real estate agents may rebate a portion of their commissions to clients and urged them to take advantage of rebates to increase price competition and benefit consumers. Through this FAQ on Real Estate Commission Rebates, we will go through every possible scenario and outcome.
2. What is the commission structure in NY for real estate deals?
The typical real estate commission in NYC amounts to 6% of the property’s sale price. However, the commission could be 5% on some listings if the seller negotiates a lower rate with their listing broker. However, buyers do not pay commissions to their brokers as the seller pays these fees, and the commission gets split between the brokers: 3% for each side.
3. Is NestApple a licensed real estate broker?
Absolutely. NestApple operates as a licensed real estate broker and offers a full-service experience. As a result, clients receive the same top-tier professional service. Indeed, we work together from the moment you identify a property you like (including pricing analysis, bidding advice, expert negotiation, and so forth) and stay with you until the closing table.
4. Why does NestApple offer real estate agent commission rebates?
Technology and the internet have greatly diminished the role of full-service real estate agents by making it easy to search for homes. As a result, NestApple was created in the belief that buyers, sellers, tenants, and landlords can take advantage of that to have a better experience and save money when buying and selling real estate. Lastly, we give real estate commission rebates to the buyer to encourage greater competition through lower transaction costs.
6. What’s the catch?
There isn’t one! You get paid by NestApple to buy a home. Despite the explosion of real estate prices, that “6%” fee has not been affected by the growth of mobile technology and the internet over the past 20 years.
7. Where does my cash back rebate come from?
The seller has agreed to pay a 6% commission for listing the apartment with a broker, and the listing agreement establishes that in NYC. However, if you place an offer on your own (without a broker), the 6% commission goes entirely to the seller’s agent, who earns the complete 6%.
8. Will this upset the seller if he finds out about the rebate?
Absolutely not. The seller agreed in writing to pay the listing agent 5 to 6% of the purchase price, regardless of the commission split. In other words, your deal with Nestapple does not affect what the seller gets paid for selling that home. Therefore, some buyers can pay even more for the house using that cashback rebate, which is sometimes positive for the seller.
17. Will I be discriminated against by listing agents because of this rebate?
No. Thanks to NestApple, the listing broker will get its 2.5% to 3% fee once the deal closes. Remember, it remains illegal to discriminate against someone for having representation: the New York Attorney General stated that he would investigate any allegations of discrimination against brokers engaging in rebating.
18. Is my offer more likely to get accepted if I work with NestApple?
Absolutely. Listing agents advise their clients to take the best offer. For instance, you can use that real estate commission rebate to buyer in your bidding strategy. The cashback may help you make a higher offer and compete more aggressively vs. other buyers. Sometimes, in a bidding war, you can use your cashback to bid higher than the maximum you are willing to pay to win the property.
20. What if I need advice?
Our 24/7 expert support staff can answer any question you have. Therefore, aside from getting paid to work with NestApple, our experienced team offers you the added protection of having guidance at every step of the home buying process.
21. Is my commission rebate taxable?
A real estate commission rebate to buyer is NOT considered taxable income as they are considered a “price adjustment.” Therefore, we do not issue any 1099 form to you. When you sell your home, your cost basis will be lower in the future. For instance, a $1 million apartment will generate a rebate of $20,000 on which the buyer does not pay any tax. Thus, the actual net cost of the home is $980,000.
22. If I start working with NestApple, will I have to pay any fees?
None. There are no fees for our service and nothing to spend out of pocket. In other words, The only person who gets paid is you. Our services are 100% free if you do not close. In conclusion, you do not pay NestApple anything upfront or ever, and the seller pays the commission at closing, which we will split with you.
24. How do you handle the negotiation process?
NestApple will work closely with you to guide you through the negotiation process. Therefore, we discuss a bidding strategy: price, timing, concessions, and how to increase your chances of getting an offer accepted.
25. How do you handle the closing process (lawyer, inspectors, and mortgage brokers)
We work with our clients at each step of the process and can refer them to lawyers, inspectors, and appraisers. It is illegal for real estate brokers or mortgage and real estate attorneys to pay each other referrals. In short, NestApple will only make recommendations because we worked with those people and think they are the best at what they do.