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Broker questions real estate rebate practices

All fees should be disclosed, says HUD

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Jeff Byrd, president of Eagle Realty in Roseville, Minn., stood up during a real estate conference two weeks ago and asked about the legality of rebates that are paid to consumers without lenders' knowledge. Byrd questioned whether real estate companies that offer real estate transaction-related rebates keep lenders informed about these rebates, and whether fraud is committed if lenders aren't informed about the rebates. The real estate panelists he addressed, who were brokers and executives at discount and limited-service real estate firms, had no immediate answers. A number of real estate companies offer some form of rebates to consumers, among them LendingTree, HouseRebate and some Help-U-Sell franchises. Byrd said this week that he has continued to probe into the rebates issue. "I am getting conflicting opinions on the legality of commission rebates that are not shown on the HUD-1," he said. The HUD-1 is a standard financial disclosure form used in real estate transactions. "Some ...