Payment of Rebate to Buyer: Blue Tag Realty, LLC has agreed to offer the Buyer a rebated portion of the brokerage fee in accordance to the following: (1) The rebate will not exceed $3,000.00 and the final agreed upon sales price of the home will not be less than $200,000.00. (2) The real estate must be residential 1 to 4 family, short sales do not apply. (3) The rebate will be applied to closing costs and will be reflected on the HUD-1 form. Blue Tag Realty will NOT issue payment to buyer(s) outside of closing as mandated by the Texas Real Estate Commission (TREC).
Is it legal to rebate real estate commissions?
Yes! Click on the link to confirm what the Texas Real Estate Commission has to say: Texas Real Estate Commission’s website. Texas and the US Department of Justice — encourages real estate rebates. Why? Because rebates are helping introduce competition in an industry where true price competition is rare, despite the shift that has occurred in technology. A few years ago the Federal Trade Commission (FTC) and DOJ issued a joint report “Competition in the Real Estate Brokerage Industry,” praising new business models like ours that are starting to make the real estate industry more competitive.
How does the rebate work?
- Blue Tag Realty helps our Buyer clients by applying a Rebate at closing as a credit against their buyer closing costs. This reduces the amount the buyer must pay at closing, so the rebate is as good as cash.
- It is illegal for us to pay rebates outside closing and all realtor rebates must be disclosed on the closing statement. Real Estate settlements are subject to “TRID,” the TILA/RESPA Integrated Disclosure rule (TILA is the Truth in Lending Act and RESPA is the Real Estate Settlement Procedures Act). TRID rules state: “1. Credits from any party other than the seller or creditor. Section 1026.38(j)(2)(vi) requires disclosure of a description and the amount of items paid by or on behalf of the consumer and not disclosed elsewhere under § 1026.38(j)(2). For example, credits a consumer receives from a real estate agent or other third party, other than a seller or creditor, are disclosed pursuant to § 1026.38(j)(2)(vi)…. Similarly, if a real estate agent rebates a portion of the agent’s commission to the consumer, the rebate should be listed as a credit along with a description of the rebate, which must include the name of the party giving the credit” (see p.1858-1859) at http://files.consumerfinance.gov/f/201311_cfpb_final-rule_integrated-mortgage-disclosures.pdf).