Real Estate

Realtor Home bought cashback commision

  • Last Updated:
  • Mar 17th, 2019 11:43 am
Deal Addict
Mar 27, 2004
4628 posts
2277 upvotes
Toronto
For any one that doesn't understand how rebates work, or you get some bs about deductions for taxes, you ask your agent providing the rebate to provide you with the OREA Form 640, TRADE RECORD. There is a section on there called "referral fee". This is where the Buyer agent would indicate a rebate to the Buyer. The Broker of Record signs off on this. You don't need a separate written agreement indicating you are getting a rebate. The rebate cheque will be issued directly by the buyers agent brokerage without any deductions. This is how my brokerage handles rebates, and other brokerages should be the same.
Full-time Realtor
Deal Fanatic
Jul 3, 2011
5768 posts
2931 upvotes
Thornhill
oasis100 wrote: For any one that doesn't understand how rebates work, or you get some bs about deductions for taxes, you ask your agent providing the rebate to provide you with the OREA Form 640, TRADE RECORD. There is a section on there called "referral fee". This is where the Buyer agent would indicate a rebate to the Buyer. The Broker of Record signs off on this. You don't need a separate written agreement indicating you are getting a rebate. The rebate cheque will be issued directly by the buyers agent brokerage without any deductions. This is how my brokerage handles rebates, and other brokerages should be the same.
Sorry, the only paper trail you provide is not how it should be handled.

While the Trade Record would record the rebate payable by the brokerage, it is an after the agreement of purchase and sale document. It is about properly documenting an agreement with the client prior to actually representing them, not after you represent them. It avoids this:
...In or about September 2013, Ms. Cai indicated she would rebate the Buyers 50% of her
commission from a purchase transaction in which she represented them (the “Buyers
Rebate Agreement”). At no time did Ms. Cai reduce the Buyers Rebate Agreement to
writing, submit it to the Buyers for their signature, and/or provide them with a copy,

contrary to Section 2 in respect of Section 14 of the Code of Ethics under the Act
(“the Code”), and contrary to Sections 3, 4 and 5 of the Code.
...
https://www.reco.on.ca/complaints-enfor ... decisions/
S.S is a lawyer it's unlikely he would care to find his brokerage or one of his members in either of the above or this situation. I'm sure if you ask him, he'll tell you to enter into a buyer rebate agreement.
https://www.canlii.org/en/on/onscsm/doc ... pletePos=1



Then there is this from the RECO Registrar
First of all, make sure you get your representative to agree in writing to pay the rebate. This may be included in the representation agreement, or it may be in a separate written agreement. Read the agreement thoroughly and make sure you understand it before you sign. And the same rule should apply to any other binding contracts you sign.

You should also clarify how the rebate will be paid. The brokerage might issue you a cheque after closing, or the individual broker or salesperson may issue a cheque once they get paid by their brokerage.
https://www.reco.on.ca/ask-joe-question ... tive-work/

A commission agreement with a client or customer must comply with the requirements of sections 11, 13, 14 and 15 of the Code of Ethics. Keeping written records of all aspects of the transaction, including the rebate, will help protect all parties if a dispute arises. Changing or confirming the commission after the original agreement requires appropriate documentation, presented to the client or customer for signature.

...No matter which method is used, there may be income tax or HST implications. If you are considering offering rebates you should contact the Canada Revenue Agency to determine the tax implications for you, your clients and your customers. You should advise your clients and customers that there may be tax implications and to seek professional advice.

...registrants have a duty to ensure that the promotion, documentation and delivery of the rebate comply with REBBA 2002. Failure to do so could result in disciplinary action. In addition, brokerages may establish their own policies and rules regarding rebates over and above REBBA 2002 requirements.https://www.reco.on.ca/registrars-bulle ... customers/
I think you should have a conversation with S.S as to your only method of recording a rebate.

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