I want to give some cash back to my buyer at closing as a thanks for using me...
How does this go into paperwork? Do I let the title company know and they set it up?
I have no idea how this works at all ... I will be proposing this offer to a potential client next week.
Thanks for any and all help.

I think it's best to ask your broker this question. Every office does it differently. Does your broker require you to do a commission distribution form?

Understand how this process work and make sure that the client doesnt miss understand.

Why?

i don't understand the guys who want to discount thier commissions?

I've bought home warranties before, or ended up paying for home inspections on the HUD. but never wrote a buyer a check at closing for money back

Inexperienced agents might have to buy clients since they have nothing of value to offer the client. I refuse to buy a client. They can take a hike.

I think the original poster asked for instructions of doing so. He didnt ask if he should do it. Most of all, it's okay to disagree with how people run their business, but you should leave your judgemental attitude behind.

Why not just a nice closing gift to thank them instead of cash at closing? If you still want to give cash at closing, then it will depend on your state regulations. You should discuss with your broker who can tell you the correct procedure.

Maybe I miss read the question.

I would talk to my broker if I were you to see what they would recomend.

In most states that I know of You can not pay an unliscensed person? I don't know if that would be considered paying an unliscensed person or not? I've saw a lot of companies do this.

I would think the best way to do this would be to have the attourney/title company do it.

I don't understand why many agents don't get this. An unlicensed person may not receive commission from a transaction UNLESS it's the prinical to the transaction.

Here atleast, I know you can contribute to closing costs or to specific items on the hud.

I have threw in a couple hundred bucks on a ton of closings.

Last week I was representing a seller on a transaction and the buyer was about $400 short at closing. The other agent and I split the $400 and contributed $200 each. It was all done on the hud. We never handed over any money.

I think it would have been a problem if after the closing we each wrote the buyer a check.

Give a closing gift but not part of your commission unless you want to throw your hard earned money away. Also, any referrals from the person you rebate money to will probably EXPECT a rebate from you. If you don't value your own time, then why not give your buyer 100% of your commission?

WOW- Judgmental much?

It is not the case, but if I were to give $10,000 back to every one of my clients- how and why does that affect you?

I am not looking to buy clients.
In this case, if this elderly widow happens to refer clients to me... then they will have a rebate from me too. Not a problem.

I get a bad taste in my mouth when I see such greediness amongst agents. If I can support my family on 3% commission, there is no need for me to accept 4% when that money would be so much better spent elsewhere - eldery widow, no family, starting over.

At our brokerage, an agent completes a sales worksheet at the time an escrow is opened, wherein the agent indicates the commission split in the transaction, who is paying for inspections, any credits, any rebate, etc. The title company executes the details according to the instructions in the broker's demand. If a client receives commission which was otherwise due the agent, then the client should get a 1099 so that the agent doesn't pay taxes on the amount transferred. Your broker may do things differently, so I'd check with your broker.

Thanks... man... I really need to delete that snippy post above!

You and I are on the same page with this one. The Buyer's Agent can give 100% of his/ her commission back to principal if he/she wants. Just remember to 1099 the receipient (Broker should take care of that portion of the paperwork). And remind the receipient to add that as income on the taxes. I have had that happened to a previous client and the IRS came back to remind them of that.

This is not a tax advice. Common sense of declaring income.

From USDOJ:
"Rebates are typically cash payments from the real estate broker to his or her client after closing."
http://www.usdoj.gov/atr/public/real_estate/rebates.htm

With respect to 1099's, I think you all have that wrong too.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/08/AR2007060801290.html

In Oregon, you can't pay a non-licenced person part of your commission.

I usually give a nice closing gift, in the $100 range (Commissions average about $6k after my split, to put that in perspective).

Buyers, REAL buyers, are the hot commodity in these here parts these days!

-jeff

The way I understand it, you can do anything you want with your commission at the close of escrow. It's your money, give it all away if you want, but you can only write off upto $25 unless it is towards Travel or entertainment.

Could be wrong, so I would run it past your broker...

http://www.washingtonpost.com/wp-dyn/content/article/2007/06/08/AR2007060801290.html

"However, the Internal Revenue Service has taken the opposite position. In a private letter ruling Feb. 9, the IRS said that such cash rebates are not income but rather represent an adjustment to the purchase price of the home.

Such rulings may not be cited as precedent, but they do reflect the thinking of the IRS. Accordingly, it is safe to say that a real estate commission rebate does not have to be reported as income."

Looks to me that a rebate is neither income to the buyer or income to the agent; however, always consult a tax professional.