Just a reminder concerning recent law changes and the impact on previously acceptable practices regarding commission rebates. I was listening to one of the sessions from NAR (yes, still going strong after 5 months) and I liked the following advice concerning buyer concessions. While in the past it was alright to pay the buyer a “rebate”/commission reduction after closing, with last year’s Mortgage Fraud legislation this practice is no longer acceptable. A rebate/commission reduction can still be done, but it must meet certain conditions.
The conditions are as easy as 1,2,3. They are:
1) It must be on the contract;
2) The lender must be aware of it; and
3) It must be on the HUD 1.
These conditions apply for any reductions that an agent might make.
Could get interesting to mention a rebate / commission reduction in the purchase contract as the buyer normally has nothing to do with the compensation agreement. Another way to “muddy the waters” if something “goes wrong?”
Interesting stuff.. Thanks for sharing.
[...] Good advice! And strangely similar to Jim Sexton’s last post. [...]