Defining and Discussing Rebate

The old dogs say rebate is unethical. I say it is only a business policy by choice of some sellers (especially Developers) and it is just a matter of pricing policy to standardize a retail price; but it cannot be imposed as ethical standard for all businesses.

Prohibition of Rebate can be permitted as "internal policy" of a Developer or an Association, which affects all their accredited/member Brokers and Salespersons. However, it cannot be imposed upon everyone; hence it cannot be entered in the Code of Ethics and Responsibilities (CODER) for RESPs.

Brokers buying properties for their own selves must be automatically favored with something we call Fellow's Discount that is equivalent to the allocated Agent's Commission. This is the relevance of mandatory disclosure if a practitioner is buying it for his/her own. We could put this in the CODER with proper explanatory note. It's like in Doctors, they normally wave Professional Fee when the patient is a fellow or a parent or spouse of a fellow.

Robert Miraflores: Have a clean conscience....look at it as a discount everybody gives it...that's what it is...As for me...if I don't feel like giving a discount on my commission which is always the case, I simply drop the deal or ask either side to shoulder the discount...any way, we only get paid on percentages. The cardinal rule I have is ...I DONT BEG FOR MY COMMISSION BECAUSE MY SERVICE HAS BEEN RENDERED....NO MORE NO LESS..

Rltr John R Petalcorin: Wait wait wait. Do you understand what REBATE is? Rebate is you "return" a part of the whole amount that is paid to you.

EXAMPLE: A seller's agent gets paid commission by the Seller. The Seller's Agent returns part of it to the one who paid him (which is basically the Seller). That is rebate.

Another EXAMPLE: A buyer's Agent gets paid professional fee by the Buyer. The Buyer's Agent returns part of it to the one who paid him (which is the Buyer). That is rebate.

Another EXAMPLE: A Buyer pays the Total Contract Price to the Seller. The Seller returns part of the payment already made back to the Buyer. That is Rebate.

NOW, I want you to look at a different example I am about to explain and ask yourself if this is a Rebate. Buyer paid TCP to the Seller. Seller paid Commission to the Seller's Agent. The Seller's Agent paid SOMETHING to the Buyer, which is a part of the Commission. Is this "SOMETHING" a Rebate? NO this is not a Rebate because the Buyer is not the one who paid the Seller's Agent. It is a Rebate if the Seller's Agent returns part of the commission back to the Seller.

Fred Bautista: hindi naman siguro unethical kong balatuhan natin buyer ng commisssion natin or pati ang seller...halimbawa blowout sila sa eat all you can.happy yong dalawa sa bundat...

Rltr John R Petalcorin: A Rebate is a precondition prior to consummation of the sale. It is something that is obligated in written or verbal commitment. Gratuity (blow-out) is not a Rebate.

Fred Bautista: suki buyer binitbit k sa developer na nagustuhan...usapan hati sa commission aba'y payag na ako noon kesa mawala pa suki mo.parang sa palengke pag suki pwede tawad sa tubo...palagay ko it is not unethical yan..

Robert Miraflores: Korek ka John....a Rebate is always a precondition to consumate a sale...wherein you are obligated and usually a broker/agent is pressured by either the buyer or the seller against his will to offer that. In my case, I don't entertain rebates....TUMAWAD NALANG KAYO....I strictly work on percentages ....kung 5% eh di 5%, kung 3% eh di 3%, it would depend on me if I like to work a deal on a set percentage. But once the commission parameters are set, then THAT'S IT with me. I only care about the percentage....

Robert Miraflores: Fred Bautista, I guess it's not unethical, kung sa umpisa palang pinagusapan na ninyo ng buyer mo. Kasi may mga pagkakataon na ang regular investors ko tumatawag sa akin at nagpapaarange ng purchase ng isang property sa developer, pero inuunahan na ako na hahati sa commission. Sa akin okay lang yun, kasi hindi naman ako nag offer ng property, sariling research ng buyer ko yun...Pero hinding hindi ako pumapayag ng rebate sa mga properties na hawak ko na minamarket ko ng sarili. Ang parating sinasabi ko sa buyer ay "MAG OFFER NALANG KAYO", at sa seller ay, "Ibigay ninyo lang ang property sa price na mabibigay ninyo ang percentage na pinagusapan natin" usually 5%.. at most often, pag dating sa dulo ng negosasyon, ay tumatawad sa commission ang seller. Nasa iyo nalang yun kung magpapatawad ka...it's your decision...kung hindi ka payag, just DROP the deal, if you can afford it...ganun lang ka practical and simple yun..

Fred Bautista: "It is a Rebate if the Seller's Agent returns part of the commission back to the Seller." yong mga "old dogs" normal na yang rebates.karamihan na seller eh friend na nila. "benta natin conjugal property namin gagawin kita exclusive,hati tayo sa kita pang gimik ha?'...

Annalissa Gutierrez: for me, parang di naman unethical ang rebate... it is like discount in favor of the buyer or seller.. pinaganda lang, rebate..or ( co-mission")hehehe... palagay ko naman, mostly sa lahat ng industriya, meron ganyan... mapa doctor, lawyer, salesman, sa military , sa gobyerno lalo na... bakit ba pinalalaki nila yang issue na yan kung unethical o hindi... nasa tao yan at nasa usapan yan.. e ang legal nga, ginagawang illegal .. yan pa kayang ethical at unethical issue na yan.. in short, deal with your conscience.. peace... opinion ko lang po yon...

Ferdie Santos: John, as you define rebate as part of a whole amount. then it is in conflict on the example you also provide which has bearing on "who paid". malinaw ksi na yung comm is a part of the tcp, but in this case hawak ng broker instead of seller. I agree as you define it, irregardless of the flow of money, as long as it was a part of the whole, which finds its way back to who paid, that's rebate. It's common practice in house agents gives rebates to buyers ksi may quota sila at nakasalalay ang allowance nila sa benta. aba, we brokers can have this agents esp unlicensed out of business. we can give a much higher rebates to buyers... hehe kailangan lang i announce sa buyers. Rebate is a "returned" part of the whole amount. commission is a part, percentage of that whole amount. it was not mentioned in your definition that is has something to do with who handles the money but simply the flow back of a portion.

Rltr John R Petalcorin: Topic is about Rebate. Not about Refund.

Ferdie Santos: My 1st and 3rd post simply repost your definition of rebate and questioning your posts above. you define it as refund din pala. I didn't realize that the definition of rebate above as you define, which I'm trying to refute was all about refund. my bad

Rltr John R Petalcorin: Regarding "Discount on Commission". The Broker, as a seller's agent, have prior authority to sell or accreditation agreement with stipulation of how much commission is agreed upon. If the Broker is amenable to a reduction of commission per potential Buyer's request, then the Broker must disclose this agreement to the Seller and make necessary amendment to the Authority to Sell in writing. I said Amendment in ATS, not a Rebate Consent.

If there is anything else important that I forgot to include in this article, or if you experienced a real estate transaction that is anomalous, scam, fraudulent scheme that you want me to document and expose for others to be warned, or if you want to donate to the war chest of real estate consumer rights advocacy, please feel free to email me at JohnPetalcorin@Gmail.Com. If you want to comment about this article, there is a provision for this purpose that you can find below.
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