First, the disclaimer: I have no direct knowledge of the particularly abhorrent practice in which some brokers take kickbacks. Nor do I know how widespread it is.
But I recently heard that one way some brokers add to their income is by accepting money from vendors that they choose for their clients.
Cited as an example were furniture rental companies that brokers use to stage a property going on the market at the seller’s expense. (Brokers do occasionally absorb the cost themselves.)
The rental companies supposedly kick back a portion of the fee in exchange for the broker’s recommendation.
In the event that a broker informs the seller of the arrangement, of course I don’t see anything wrong. But I think a broker who secretly pockets extra cash in any circumstance related to his work on behalf of a client is reprehensible.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022