FAQ1 Backup
NO! Current Arizona Real Estate Licensing laws have specific regulations.
The following applies to properties listed for sale on the MLS by Realtors. It does not pertain to For-Sale-By-Owner properties, where no commissions are offered.
In Arizona, a buyer can receive a portion of the real estate commission through a rebate, which is typically processed by the title company during escrow. This practice is legal and regulated by the Arizona Department of Real Estate.
Key Considerations:
Broker Involvement: The rebate must be handled through the buyer's real estate broker. The broker provides specific written instructions to the title company to disburse the rebate to the buyer during the closing process.
Disclosure: It's essential to disclose the intent to provide a rebate to all parties involved in the transaction, including the seller, lender, and title company. This ensures transparency and compliance with legal and ethical standards.
Lender Approval: Some loan programs may have restrictions on commission rebates. It's crucial to consult with your lender to confirm that receiving a rebate won't affect your loan terms or approval.
Escrow Process: The rebate is typically applied as a credit toward your closing costs and is reflected on the Closing Disclosure Statement. This arrangement should be clearly documented to ensure all parties are aware of the rebate and its application.
Steps to Receive a Commission Rebate:
Discuss with Your Broker: Ensure your real estate broker offers commission rebates and understands the process for issuing them. Not all brokers provide this service, so it's important to confirm beforehand.
Obtain Lender Approval: Inform your lender about the rebate to ensure it complies with your loan program's guidelines. Some lenders may have caps on rebate amounts or specific requirements for applying the rebate.
Document the Rebate: Work with your broker to include the rebate details in the purchase agreement and ensure all necessary disclosures are made to the seller, title company, and any other relevant parties.
Coordinate with the Title Company: Your broker will provide written instructions to the title company to apply the rebate as a credit toward your closing costs during the escrow process. Ensure this is accurately reflected in the Closing Disclosure Statement.
By following these steps and maintaining clear communication with your broker, lender, and title company, you can receive a commission rebate as part of your real estate transaction in Arizona.
In other words, the above regulations apply if a property is listed for sale and the seller is offering a commission. You must work with a licensed agent to negotiate commissions. That may change with the many new developments in the industry.
Please look at the first question and answer regarding buyers legally receiving commission rebates.
To negotiate commissions with an agent, they must agree to work with the rebate process described in question one. Agents on this website have agreed, but other agents may not.
That agreement must be made before you start working with an agent or tour a home for sale.
Depending on your lender, you can apply the commission rebate towards your buyer's closing costs.
Any money that cannot be used for closing costs may be rebated in one of two ways:
- The broker representing your agent will rebate the negotiated commission to you at or after closing.
- Alternatively, this website will collect the commission rebate and return it to you after closing.
- Any commission money left over after being credited toward closing costs will be rebated after closing.
- If you receive a rebate after closing, you may use it for any purpose, such as purchasing new furniture, moving expenses, appliances, etc.
- Most lenders will not allow commission money to be used towards a down payment. For more clarification, ask your lender.
- Yes, you can, but understand that the listing agent may require you to sign a buyer-broker agreement outlining the commission for buyer-agent services. By doing so, the listing agent would represent you (the buyer) and the seller, creating a dual agency. This arrangement can lead to potential conflicts of interest, as the agent must balance the interests of both parties. For better representation and to ensure your best interests are prioritized, we recommend hiring an agent who will work exclusively for you.
- Alternatively, you can ask the listing agent to show you the property while clearly stating that you will find an agent to represent you in the purchase. Keep in mind that the listing agent may or may not agree to show you the property.
Select one of the agents listed in Step 3. They will reach out to sellers on your behalf to determine the commissions being offered by the seller.
If you want to find out on your own:
- Look for the seller's agent information, typically listed as “Listed by…” on most real estate websites.
- Contact the Listing Agent Directly:
- Call the listing agent and ask if a buyer agent commission is being offered and the amount. You don’t need to be a Realtor or agent to inquire about commissions or property details.
- That is the aim of this website; give you flexibility in working with different agents until you find one you want to work with.
- If you want more flexibility in working with more than one agent, include terms limiting the Buyer Broker Agreement to specific dates and or properties.
- Depending on the Buyer Broker agreements you sign, you may have the flexibility to work with multiple agents. To avoid paying multiple commissions, it’s essential to carefully review and understand any agreements you sign with agents.
- Go to Step 3, Pay-Per-View Homes. Enter the property's City to find an agent. Then, contact one of the agents directly until you find one who is available. Agents on this website agree to show properties for the agreed-upon $100 per showing.
- Alternatively, have an agent you prefer and have already contacted that you can call on a moment's notice to show properties.