C Tann-Starr's Outside Blog


I was asked if I do R E rebates. Answer: No.

On February 6, 2008 Gregg Malawer, Esq. of the U.S. Department of Justice Antitrust Division located in Washington, DC received an answer regarding his correspondence to the New York Secretary of State Cortes-Vazquez, dated December 5, 2007, inquiring as to whether real estate brokers may offer and pay rebates to clients.

This answer was provided by Whitney A. Clark, Associate Attorney (New York): "Real Property Law section 442 prohibits real estate brokers from sharing commissions obtained as a result of a real estate transaction with individuals or corporations who are unlicensed. The purpose of this prohibition is to prevent licensees from compensating unlicensed individuals for services rendered that would otherwise require a real estate license. Insofar as the statutory intent of Real Property Law section 442 is to discourage unlicensed activity, offering cash or promotional gifts, such as a cash rebate, in order to attract a new customer or client does not run afoul of the statute."

I was asked if I do R. E. rebates. My answer: No.

This is the only answer I have because it is a simple, straight forward yes or no question. Sort of like asking a vendor "Do you take credit cards?" and they either answer "yes" or "no."

Do I take credit cards? Yes, I do (so do the four firms I am an independent contractor for - LOL). ;-)

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Comment balloon 10 commentsC Tann-Starr • October 13 2010 06:08PM


"I was asked if I do R. E. rebates. My answer: No."

"No." "No.'

Well stated!


Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) about 10 years ago

Me neither....it's not part of my business model and I just don't do it. Period

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) about 10 years ago

Thank you, Bill. :-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 10 years ago

Karen, I second that. It is definitely not part of any of my business models. :-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 10 years ago

Thanks for the post.  I am reminded of what David Knoxx does to commission adjustment question.  He basically listens and says aha, aha, and proceeds to ask, is there anything else you would like to ask?  And then proceeds to say, besides these points, do you see this home as something you see yourself living in in the next 5-10 years... Thus entirely dismissing the question entirely.  It's a swift strategy on his part I thought.  Cheers for now, Jark.

Posted by Jark Krysinski *PREC (Personal Real Estate Corporation), TeamYVR Team Leader, BA,ABR,IRES,IMSD,LLB (REMAX CREST REALTY WESTSIDE) about 10 years ago

Jark, a very neat strategy, indeed. I love that concept! :-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 10 years ago

I believe that NY state was required to acknowledge that rebates are perfectly legal, once it was explained to them (citing real property law is irrelevant to the updated legality of rebates in NY)- so, the question posed to real estate agents is simply, do you participate in this legal practice (rebate) or not? Amazing that even some broker owners are oblivious to the legality of rebates in NY, citing 442 when it is separate and apart from rebates. Scary.

Posted by Laurie Mindnich over 9 years ago

Perfectly legal, an interesting option, but one that I decline. Laurie, I started not doing them after a builder told me to give 2 points back on a 5% commission so I could pay for part of the closing costs he, as the seller, didn't want to pay after agreeing to the concessions requested from my buyer. Since I'm not buying the home and don't own the home why should I pay closing costs? That was it for me. I don't do rebates...

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) over 9 years ago

Carolyn, companies set up to do rebates are typically volume seekers- absent the volume, the choice becomes very muddy. What I would have responded to the builder isn't publishable on a public post. The practice of pocket picking is deplorable- rebates are an agreed to circumstance up front only, between Realtor and buyer, imo...

Posted by Laurie Mindnich over 9 years ago

LOL @ Laurie. I had a few colorful thoughts but managed to behave myself (LOL). ;-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) over 9 years ago

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