Real Estate Commission Rebates in New Jersey – Buyer Savings Guide
Go Back To Previous PageOnce you’ve saved for a down payment, checked your credit score, and identified the areas of New Jersey that appeal to you, it’s time to start looking at properties for sale. Given the high home prices and expensive closing costs in the housing market, maximizing your savings when purchasing a home is essential. Fortunately, modern brokerages offer commission rebates to help you recover some of your expenses. To inform buyers about these savings opportunities, we have created a concise guide detailing how commissioning rebates can lead to significant savings when purchasing a home or condo in New Jersey.
What is a commission rebate in New Jersey?
If you purchase a home in Fort Lee, NJ, you’ll likely want a commission rebate. Also known as a buyer rebate, this option enables buyer brokers to return part of their commission to new
homeowners after the sale closes.
However, this option isn’t commonly available. Many traditional brokerages refrain from offering rebates due to outdated practices. For example, sellers typically incorporate broker fees into the home’s pricing to maximize their profits, meaning these fees aren’t explicitly listed on the closing statement for buyers but are included in the purchase price.
Nevertheless, commission rebates allow you to challenge this conventional approach.
Save money by avoiding the traditional brokerage experience.
When homeowners decide to sell their property, they engage a listing agent to act in their best interests.
While buyers can opt to work independently with the listing agent, having a buyer’s agent is advisable. They can assist in formulating offers and advocating for the buyer’s needs.
In conventional real estate transactions, sellers usually pay the listing broker a 6% commission, which the broker then shares with the buyer’s agent. However, various alternatives exist, so it’s beneficial to consult multiple buyer’s agents and inquire about potential commission rebates.
Recent advancements in real estate technology, partnered with salaried agents, allow innovative brokerages to share a portion of their commissions with the homebuyers they represent.
Secure the most significant commission rebate in New Jersey.
Once aspiring homebuyers are aware that commission rebates exist, the next most common question they ask is, “How much are commission rebates in New Jersey?”
NestApple offers the most significant commission rebate in New Jersey, giving their clients up to 2% of the home’s purchase price back after closing.
For instance, if you bought a condo in Hoboken for $1,500,000, you could receive up to $30000 back after closing.
Commission Rebate in New Jersey – Example
- Purchase Price: $1,500,000.
- Seller’s Agent Commission (3% of the sale price): $45,000.
- Buyer’s Agent Commission (3% of the sale price): $45,000.
- Buyer Commission Rebate (1% of the sale price): $30,000.
Are buyer commission rebates legal in New Jersey?
It is legal to receive a buyer rebate in New Jersey when you obtain the keys to your home.
Commission rebates are allowed in 40 states, including New Jersey.
Brokerages can give new homeowners a portion of their real estate commission. An agent might claim they cannot pay an unlicensed buyer. However, this restriction does not apply to buyers involved in a transaction.
Do you pay income tax on a commission rebate?
NesApple can help you secure the home of your dreams. However, as each person’s financial situation may vary, you should consult a tax professional.
That said, the IRS ruled that commission rebates can be treated as reducing a homebuyer’s cost basis, not income. Also, brokerages are not required to issue a 1099 related to the rebate.
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.
