Legal Question in Real Estate Law in California

This issue has come up before on LawGuru and as I recall the answering attorneys unanimously agreed it was legal. I put the search terms "California real estate selling agent pay buyer rebate" into a Google search and found a lot of firms advertising that they will do this for buyers who use them. I would start, therefore, by pointing this out to the agent. Try to carry on a correspondence by e-mail so you will have additional evidence that the agreement exists if you need to go to small claims court. Overall, proof of the agreement may be your biggest obstacle to collecting.

Illegal activity often requires someone taking advantage of an innaocnet party and/or breaking a law. What third party is being harmed by an agreement to reduce the commission?

What I do not understand is why you are paying her a commission. She began by being the agent of the seller and then listed the property, which is still being the agent of the seller. If you had hired someone to represent you who was not already involved, she would be entitled to split the commision with the seller's agent; that does not cost you anything as it is the seller who pays the real estate agent commission. She can agree to reduce her share of the commission by giving you some of the money back, but how does that harm the seller whois stuck with paying a flat percentage commission? In a short sale, the seller ends up with no cash so is not harmed. If the agent is really a duel agent [represents both seller and buyer], she casn not charge you a fee because there is a conflict of interest [her fee raises the price you must pay].

It has been my unfortunate experience that many real estate people know little of the law or what makes common sense. Write her a detailed e-mal, that includes a summary in case she wil not read the whole letter, asking to meet with her boss if she does not agree.

[no spell check available, not proof read]

If you feel necessary, you could get an attorney to send out a letter on their letterhead demanding the refund; I charge $100 per hour for such work and you can find many other lawyers at higher prices who would be happy to handle.

There are a couple of problems with the previous answers. 1. They ignore the difference between a commission discount to a seller versus paying commission over to the buyer who pays none of the commission, and 2. they ignore that this is a short sale. In a short sale the real seller in interest is the lender. The property owner doesn't really have "a dog in that fight" as the saying goes. As long as the sale is for enough to satisfy the bank, the seller is generally not affected by the selling price (there are a lot of complications to what I just said that make it wrong in some circumstances, but this is not a law treatise and it doesn't affect my answer so let's just leave it at that). The problem with the situation you describe is that it could be considered a fraud on the lender, who is the one really paying the commission. If it were a kickback to the seller, it definitely would be a fraud on the lender, since the seller is supposed to get nothing from a short sale. A credit back to the buyer is more complicated and I would have to review the transaction before I would feel comfortable telling you whether you are the agent is correct about the legality of a credit back. In any case, however, the agent seems to have made a negligent misrepresentation to you at least, and maybe an outright fraud, if what they promised is not legal. So on that basis I believe you should be able to recover what you were promised.