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Hello, I'm hoping someone would know the answer to the below question.
Sales Agent B convinces a reluctant buyer that she will share a portion of the commission with the buyer. After the closing, she kept her word and gave some money to the buyer.
a) It's illegal to induce the buyer on this transaction
b) It's a violation of license law. Only the Broker can make such a gift.
There are a couple more choices, but those do not make sense, is it one of the above?
Only 12 states have said that giving a buyer part of the agent's commission when the buyer buys a home is illegal in their state. The others have said - give the money back, it is legal. The states are Kansas, Alaska, Mississippi, Oklahoma, Iowa, Louisiana, New Jersey, South Carolina, Missouri, Rhode Island, West Virginia and New York. If you don't live in one of those states, buyer rebates where an agent shares a commission with you is legal.
So. If you aren't in one of the listed states the answer would be B, only the broker can offer a rebate and it must come from the broker.
In AZ it would have to be on the HUD-1 as a discount of commission. And before doing that it would be advisable to run it past the mortgage broker because the underwriter may kick the loan out because of that.
Your answer will depend on your state laws, and that is where you should look to find the answer. I'm sure it's also in your study material. And you gain much more when you take the time do your own research and find the elusive answer yourself rather than have someone give you the answer.
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