Buyer Agent Commission Rebate In Florida
by Tyler Forte
Key Takeaways
- Felix Homes offers a buyer rebate in Florida â the exact amount varies depending on the commission offered by the seller to the buyerâs agent.
- The buyerâs agent commission is traditionally 2.5% - 3% of the sales price.
- Home buyer rebates are legal in Florida and 39 other states, allowing buyers to receive a portion of the commission back, essentially reducing the overall cost of purchasing a home.
- Technology has significantly reduced the workload of buyerâs agents, making the traditional commission structure appear outdated and paving the way for rebates and lower commissions.
- Despite the technological advances, using a buyer's agent is still valuable for the expertise and negotiation skills they bring to the table.
TL;DR
Here at Felix Homes, we proudly offer a home buyer rebate in Florida. This rebate provides significant savings to home buyers, challenging the traditional 6% commission structure. We leverage technology to offer lower commission fees, and make the case that the traditional 3% buyerâs agent commission is outdated. While we acknowledge the value of professional guidance in the home buying process, we encourage homebuyers to negotiate commission rates and take advantage of rebates to save on the largest investment most people will make.
Does Felix Homes Offer A Buyer Rebate In Florida?
In short, yes, Felix Homes is proud to offer a home buyer rebate in Florida! The exact amount of the rebate is dependent on the commission the seller is offering a buyerâs agent.
For example, letâs say that the seller is offering a 3% commission to the buyerâs agent. In this scenario, we would provide our client with a rebate equal to 1% of the purchase price. On the other hand, if the seller is offering a 2.5% commission to the buyerâs agent, then the buyer rebate would be 0.5% of the purchase price.
This buyer rebate â or as we call it, our Buyer Savings Program, is eligible to clients who have toured 14 homes or less with us. Once we have shown the client 15 homes, they are no longer eligible for a commission rebate.
What Is A Buyer Agent Commission?
A buyerâs agent commission is the amount of compensation an agent receives for representing the buyer in a transaction. This amount has historically been 3% of the sales price. In most cases, the buyerâs agent is only entitled to a commission if the transaction closes.
In Florida, the buyer agent commission is typically 2.5% - 3% of the sales price. Considering how the internet has allowed homebuyers to do much of the home searching themselves, the 3% commission seems drastically inflated, right?
Who Pays The Buyer Agent Commission?
Any rational person would suggest that the seller would pay for the listing agent commission, and the buyer pays the buyer agent commission. This is a big misconception. Historically, the home seller is responsible for paying the agent commission for both the buyer and seller!
On average, this is a total of 6% of the purchase price in commission fees the seller ends up paying. The buyer's agent gets a 3% fee, and the listing agent would get a 3% fee. On a $700,000 home, that is $42,000 in realtor commission fees. That's a lot of money by any standards.
Just because the buyer does not have to pay out of pocket to use the services of a buyer's agent doesn't mean it is free. A simple economics course would teach you that the buyer's agent commission is factored into the sales price. This is why so many buyers attempt to bypass the services of an agent to get a better price. Luckily, with a home buyer rebate, buyers can have their cake and eat it too by both saving money thanks to the commission rebate and also benefitting from the experience of a licensed agent.
What Is A Home Buyer Rebate?
A home buyer rebate is when a buyer's agent gives their client back a portion of their commission they receive from the seller. Think of a commission rebate like cash back on a credit card. For instance, if a buyer's agent collected a 3% commission, or $21,000, they may elect to keep $14,000 of that commission and give their client a commission rebate of $7,000.
A Realtor may decide to do this as a token of appreciation, a simple thank you, or as a way to get more clients! Commission rebates allow agents to compete for a buyer's business, not just on the level of service they provide but also the price they charge for that service. It's a win-win!
The concept of a buyer's commission rebate has become increasingly popular in recent years as buyers understand that they take on more of the legwork in the home search process. Buyers also understand that as home prices continue to appreciate, a 3% commission on a $100,000 home in 1980 is a lot less than a 3% commission on a $700,000 home today.
What Value Does A Buyer Agent Offer?
As unconventional as this may sound, the reality is, when it comes to being a real estate agent, a buyer's agent's job has drastically changed since the adoption of the internet.
What did a buyer's agent do before the internet?
Rewind the clock 15 or 20 years, and yes, these agents had their hands full discovering new inventory and manually coordinating when to physically tour homes. They would literally carry around a big binder filled with properties listed for sale. Nothing was online so if a home buyer wanted to see what inventory was available, they would first call their Realtor who would manually look through their binder and pick a few properties that met the buyer's needs.
If the buyer was then interested in making an offer on the property, doing a comparable market analysis wasn't as easy as it is today. Their agent would have to seek out all of the recent comps in their binder to manually compute their opinion of the home's value. These old-school agents didn't even have electronic signature software so every time a document needed to be signed by their client, they had to hop in their car and drive over to their client. All this time-consuming work meant that buyer agent commission rebates were never brought up until the advent of technology caused a huge shift in the industry.
How Did Technology Make The Job Of A Buyer Agent More Efficient?
In today's technological age, so much of these manual buyer agent tasks can be accomplished with the click of a mouse, or simply by scrolling on your phone. The internet and apps allow the home buyer to do most of the legwork! Buyers are able to preselect their 'requirements', and the home-search website will automatically show them homes in their desired area that meet these requirements.
If you want 4 bedrooms, there's a filter for that. If you need a two-car garage, there is a filter for that too. All you need to do is ask your Realtor to unlock the front door so you can see if the pictures live up to the hype! If you're interested in making an offer on a home, your agent can easily do a comparable market analysis to determine what a fair price for the home should be. There is no longer the need to manually compute these critical numbers! No wonder buyers are increasingly asking their agent for a rebate.
Should You Use A Buyer Agent Or Represent Yourself?
Using a buyerâs agent is a valuable asset and we encourage you to work with one. After all, purchasing a home may be the largest investment you make.
It's a good idea to have a professional in your corner to help answer any of the questions you may have and help you negotiate the purchase.
But the reality is, in today's technology-driven world, buyer's agents are just not worth 3% of the final sales price. This is why many folks are starting to ask for a home buyer rebate from real estate agents.
Is It Legal For Real Estate Agents To Give Part Of Their Commission To Buyers In Florida?
In the vast majority of the country, currently 40 of the 50 states, rebates are legal meaning agents are able to give any amount of their commission back to their clients. And yes, buyer rebates are perfectly legal in Florida!
This unique business model can save home buyers thousands. Many buyers ask for a commission rebate as they realize there isn't a great deal of work that goes into representing them in this modern era. They also understand that the job of a buyer's agent has gotten more efficient through technology and the internet.
What States Do Not Allow A Buyer Agent Rebate?
As crazy as this sounds, there are still 10 states where it is illegal for an agent to give their client a commission rebate.
- Alaska
- Alabama
- Iowa
- Kansas
- Louisiana
- Missouri
- Mississippi
- Oklahoma
- Oregon
- Tennessee
Although it's not legal for an agent to give part of their commission to the buyer in these 10 states, the commission rate can still be negotiated. There is no law mandating that the buyer's agent must take 3% of the purchase price as their commission.
How Can Felix Homes Help?
Felix Homes is a low-commission real estate brokerage. We work with both buyers and sellers and help keep more profit in your pocket on each real estate transaction.
Not only do we charge a lower commission on the buy side, we charge a flat 1.5% commission fee when we sell a home for our clients. On average, we help our clients save $12,375 when they choose to list their home with Felix. Our clients are able to save on commissions and use that cash for other important expenses such as a home renovation, family vacation, or downpayment on their dream home!
How Do We Charge Lower Commission Fees?
This is such a common question, and we love answering it! The fact of the matter is, we believe technology changed the real estate industry, but traditional Realtors are holding onto a higher commission fee for obvious reasons. Many years ago, paying a 6% commission fee may have been appropriate, but in today's world with all the real estate apps, online photos, home search websites, and virtual tours, that fee is no longer needed.
In addition, the average home price has skyrocketed. Commissions on a $700,000 are a lot more than what they would be on a $100,000 home. The 6% commission rate has stayed relatively unchanged, but all the variables that make up the rate (effort and price) have changed!
Our Final Thoughts On Buyer Rebates
In wrapping up our discussion on buyer agent commission rebates, it's clear that the landscape of real estate transactions is evolving, with technology at the forefront of this change. Felix Homes stands committed to adapting to these changes, offering buyer rebates as a testament to our belief in fair and transparent pricing.
We understand the significance of purchasing a home and strive to make this process as beneficial as possible for our clients. Our approach is rooted in the value we see in every home buyer's journey â empowering them with savings that extend beyond the transaction. In a market where every dollar counts, Felix Homes is proud to lead the charge in offering a financially savvy pathway to home ownership, ensuring our clients don't just find their dream home but also retain more of their hard-earned money in the process.
