Commission rebates could entice NJ buyers to take the plunge

New York /
Jan.January 23, 2009 10:58 AM

 
Legislation pending in the New Jersey Legislature would allow brokers to offer rebates to Garden State buyers.

The bill, passed last week by the State Assembly’s regulated professions committee, would allow buyers to negotiate with the broker for a percentage of the commission to be rebated back in the form of a check or a credit, likely to be used to cover closing costs. Assemblyman Patrick Diegnan, a Democrat in Middlesex County, said he introduced the bill to stimulate real estate purchases and aid buyers with closing costs.

“I practice law and for years I’ve seen circumstances [with] buyers who can buy a house but not cover $1,000 in closing costs,” he said. “In a housing market we have now, anything we can do to encourage people to invest [in] real estate is good.”

Diegnan said he hoped the ability to receive a rebate to cover purchasing costs, such as the closing, would bring more buyers into the market by allowing them to spend less money on a home purchase. He said real estate agents in his district have expressed interest in such a bill.

The New Jersey Association of Realtors opposed the original bill, which would have allowed rebates for sellers as well.

Jarrod Grasso, the association’s executive vice president, said the group worked with the Assembly committee and Diegnan to draft amendments to remove rebates for sellers along with making sure information clearly states that the rebates would be taxable. Grasso said the association did not want sellers to be included because they can already negotiate the amount of a commission with a broker when signing a contract.

Grasso said the association is not actively supporting or opposing the amended bill as it works through the legislative process, but noted it would bring New Jersey in line with other states that offer rebates. Diegnan said the bill will likely go before the full Assembly in February and will be heard by the state Senate in the spring. He hopes a final bill will be sent to Gov. Jon Corzine by the end of June.

Real estate salespeople have mixed opinions on the rebates.

Lauro Arantes, a salesperson with Weichert Realtors in Jersey City, said he believes that the rebates would help bring more buyers into the market.

“It would be one more way to attract buyers and provide a service,” he said.

William Decker, an agent with ERA Meeker Realty in Cranford, said he is opposed to the bill, saying that it would cause conflicts during the sales process.

“I don’t like it,” Decker said. “It seems conflicting that you’re getting a buyer and showing them a property and getting a commission and then you’re giving part of it back.”


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)
Hudson Yards megadevelopment inspires a new line of sex toys
Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)
Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Salesforce CEO Marc Benioff and Amazon's Jeff Bezos are backing the startup (Getty, Arrived)
Bezos-backed Arrived Homes is latest startup to expand real estate investment
Bezos-backed Arrived Homes is latest startup to expand real estate investment
Josh Baumgarten (left) and Adam Schwartz, co-CEOs and co-Chief Investment Officers of Angelo Gordon with 2 Huntington Quadrangle, Melville, 6 and 8 Corporate Center Drive in Melville (Angelo Gordon, We're Group)
Angelo Gordon, We’re Group score $350M refi for Long Island offices
Angelo Gordon, We’re Group score $350M refi for Long Island offices
NYC’s office sublease surge slows as tenants move to reoccupy space
NYC’s office sublease surge slows as tenants move to reoccupy space
NYC’s office sublease surge slows as tenants move to reoccupy space
The Roger New York hotel at 131 Madison Avenue, Larry Korman of AKA Hotel Residences and Joe Lubeck of Electra America (Google Maps, Getty, Electra)
Electra America JV nabs Roger hotel for $71M discount
Electra America JV nabs Roger hotel for $71M discount
Orchard's Patrick McClymont and HomeLight's Sean Aggarwal (Photos via IMAX, The Org)
Orchard, HomeLight move toward IPOs with new execs
Orchard, HomeLight move toward IPOs with new execs
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...