agent rebate

[gld2]

My agent agreed to pay me the rebate, which could not done through the escrow.  So we signed the agreement,  the agent will pay me once the escrow is closed and his commisions got paid. Now it is one month passed,  I have not received the rebate check.  What can I do to get the money back?

Thank you

 

[qwerty]

My agent agreed to pay me the rebate, which could not done through the escrow.  So we signed the agreement,  the agent will pay me once the escrow is closed and his commisions got paid. Now it is one month passed,  I have not received the rebate check.  What can I do to get the money back?

Thank you

have you asked your agent if he has received his commission? typically the money goes to the agents broker, then there could be some time before the broker pays the agent the commission.  if he has received his commission you should ask when you can expect to receive your check. it probably doesnt hurt to check with the broker to see if they have disbursed the agent the commission.  if the agent has already been paid and stringing you along then you will likely have to sue - hopefully you have a written agreement. if you you do sue and win, the judgment would be given to his broker so the broker can withhold the amounts owed to you.

 

[gld2]

we have a written agreement.  I sent emails to the agent to ask if he got the commisions,  then ask for the rebate,  however he didn't reply my emails. 

My agent agreed to pay me the rebate, which could not done through the escrow.  So we signed the agreement,  the agent will pay me once the escrow is closed and his commisions got paid. Now it is one month passed,  I have not received the rebate check.  What can I do to get the money back?

Thank you

have you asked your agent if he has received his commission? typically the money goes to the agents broker, then there could be some time before the broker pays the agent the commission.  if he has received his commission you should ask when you can expect to receive your check. it probably doesnt hurt to check with the broker to see if they have disbursed the agent the commission.  if the agent has already been paid and stringing you along then you will likely have to sue - hopefully you have a written agreement. if you you do sue and win, the judgment would be given to his broker so the broker can withhold the amounts owed to you.

 

[usctrojancpa]

Different brokers pay their agents commission differently.  In the cases where I can not credit my buyers the rebate into escrow, I usually cut them a check within a few days after escrow has closed and titled has recorded the transaction.  I ask the escrow company to wire out the commission to my broker and in those circumstances I'll get my commission within 2-3 days (my broker wires them over to me after my file has been reviewed).  In circumstances where there is a check, it may take me up to 7-10 days to get my commission (depends on where the check was sent and then how many days the broker's bank will hold the check to clear).  Anyhow, since it sounds like it's been longer than 10 days I could consider sueing the agent using the signed agreement as your basis for suing him.  Good luck and keep us posted.

 

[qwerty]

yeah is he is not replying to your emails you can see what his intentions are, maybe follow with some calls in case he didnt get your emails (highly unlikely).  times are tough and we know some agents arent as ethical/reputable as USCTrojanCPA or IR2.

there may be some recourse against the broker since they are a party to the transaction?

good luck and keep us posted.

 

[irvinehomeowner]

Usually, when the agent won't return your queries... go to his/her broker... that should get you some traction.

 

[gld2]

I just got an email back,  and was told the file was not closed yet as he is away. 8)

 

[gld2]

Called the agent's broker, no answer.  Also emailed the agent, no reply, called, not picking up.  What is the process to sue an agent?  what if file a complaint at DRE?

 

[irvinehomeowner]

Can you leave a message with the broker? I would recommend pursuing that first rather than going GangSUE-style.

 

[gld2]

I called the broker which is not a individual,  a company.  The Front desk just simply put me on hold,  would not transfer my call.  Who can I speak directly?  >

Can you leave a message with the broker? I would recommend pursuing that first rather than going GangSUE-style.

 

[usctrojancpa]

I called the broker which is not a individual,  a company.  The Front desk just simply put me on hold,  would not transfer my call.  Who can I speak directly?  >

Can you leave a message with the broker? I would recommend pursuing that first rather than going GangSUE-style.

You can also try going to the brokerage if they have a local office and demand to speak with the broker.  I would make for the managing broker of the office (can be different from the broker/s who own the brokerage).

 

[gld2]

It looks like the manager broker is his relative  >

I called the broker which is not a individual,  a company.  The Front desk just simply put me on hold,  would not transfer my call.  Who can I speak directly?  >

Can you leave a message with the broker? I would recommend pursuing that first rather than going GangSUE-style.

You can also try going to the brokerage if they have a local office and demand to speak with the broker.  I would make for the managing broker of the office (can be different from the broker/s who own the brokerage).

 

[gld2]

His broker indicated the file was  closed,  however the agent told me it was not,  >  any suggestions?

 

[usctrojancpa]

His broker indicated the file was  closed,  however the agent told me it was not,  >  any suggestions?

Did you tell the broker that you have a written agreement with the agent for the rebate?  And that if he/she doesn't pay you that you will take legal action against the agent and broker?  Light a fire under both of their butts.

 

[gld2]

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

 

[usctrojancpa]

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

It is not normal at all.  I have never had any of my buyers fill out a W-9 Form and I never 1099ed any of them.  The rebate is a non-taxable event to the buyer...it is not earned income (the buyer did nothing to "earn" the income), but rather a return of cost which will effect your tax cost basis in the home.  That's exactly how it works if the agent contributes part of their commission as a credit through escrow to be applied to the buyer's closing costs.  So why should the treatment be any different if the credit/rebate is done outside of escrow?  Tell the agent that they can deduct the rebate on Line 2 "Returns and allowances" on their Schedule C in their tax return.  There is a tax ruling for this from a Redfin case that backs up what I just said.  Good luck.

 

[irvineshadow]

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

I had to fill one out early on, seems normal.

 

[Irvinecommuter]

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

It is not normal at all.  I have never had any of my buyers fill out a W-9 Form and I never 1099ed any of them.  The rebate is a non-taxable event to the buyer...it is not earned income (the buyer did nothing to "earn" the income), but rather a return of cost which will effect your tax cost basis in the home.  That's exactly how it works if the agent contributes part of their commission as a credit through escrow to be applied to the buyer's closing costs.  So why should the treatment be any different if the credit/rebate is done outside of escrow?  Tell the agent that they can deduct the rebate on Line 2 "Returns and allowances" on their Schedule C in their tax return.  There is a tax ruling for this from a Redfin case that backs up what I just said.  Good luck.

IRS seems to agree:
http://www.irs.gov/pub/irs-wd/0721013.pdf

 

[usctrojancpa]

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

I had to fill one out early on, seems normal.

Who did you have to fill out one for?  The purpose of a W-9 Form is so that the party who receives the W-9 Form can prepare a 1099.  I sure hope you weren't issued a 1099 for a commission rebate because then you have to report it as income on your Schedule C. 

 

[usctrojancpa]

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

I had to fill one out early on, seems normal.

Who did you have to fill out one for?  The purpose of a W-9 Form is so that the party who receives the W-9 Form can prepare a 1099.  I sure hope you weren't issued a 1099 for a commission rebate because then you have to report it as income on your Schedule C. 

The agent asked me to Fill out  W9 Form.  is it normal?  I think the agent rebate is not taxable according to IRS.

It is not normal at all.  I have never had any of my buyers fill out a W-9 Form and I never 1099ed any of them.  The rebate is a non-taxable event to the buyer...it is not earned income (the buyer did nothing to "earn" the income), but rather a return of cost which will effect your tax cost basis in the home.  That's exactly how it works if the agent contributes part of their commission as a credit through escrow to be applied to the buyer's closing costs.  So why should the treatment be any different if the credit/rebate is done outside of escrow?  Tell the agent that they can deduct the rebate on Line 2 "Returns and allowances" on their Schedule C in their tax return.  There is a tax ruling for this from a Redfin case that backs up what I just said.  Good luck.

IRS seems to agree:
http://www.irs.gov/pub/irs-wd/0721013.pdf

Thank you for providing the link. 

So GLD2, provide your agent with the PDF above and copy/paste what I said so they understand.  If they have any further questions, tell me they can contact me to discuss the tax matter further.