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Real estate rebates in Florida

Florida is one of 40 states that have no bans on rebates in residential real estate transactions. A rebate is when a real estate broker offers some type of incentive to attract clients to the firm. This could include refunding part of the brokerage commission to the buyer, offering gifts with a completed transaction or even paying closing costs.

Since rebates encourage competitiveness, home buyers can benefit greatly from reduced costs related to their real estate transactions. For example, if the real estate broker offers to refund a third of his or her commission, the home buyer could save up to 1 percent of the purchase price of their new home if the commission rate is 3 percent. This would mean a $1,000 saving on a $100,000 home purchase.

Real estate brokers in states that ban incentives believe that the incentives encourage too much competitiveness between brokers. They say that this could cause them to lose clients and earn less money on each transaction. Those opposed to these incentives alleged that the incentives tempt buyers into closing on properties against their best interest. The Antitrust Division of the U.S. Department of Justice believes that these incentives do not harm the home buyer and can actually help them a great deal by lowering the overall cost of the real estate transaction.

Buyers of residential real estate can benefit a great deal from the different incentives offered by real estate brokers. Whether the incentives involve cash, gift certificates or discounts, they can give the buyers some extra spending power, which is very important when moving to a new home. Despite these discounts, it is very important for buyers to pay attention to their financial situations to ensure that the monthly payments will not be too difficult for them to handle in the future.

Source: The United States Department of Justice, "Rebates make Buying a Home Less Expensive", September 22, 2014

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