What is Home Buyer Rebate and How to Take Advantage of It
The real estate market can be very confusing, especially if you’re a first-time buyer. The abundance of commission structures and compensation models can be quite overwhelming. However, innovative real estate brokerages are now offering new pricing models that give you more options and incentives when purchasing a home.
Newer, more innovative brokerages are introducing a new pricing model for home sellers called the Home Buyer Rebate. In this article we will explain this new pricing model and how it works:
What is a homebuyer rebate?
Homebuyer rebates are also referred to as home buyer incentives and home buyer refund. The homebuyer rebate is a portion of the real estate commission a real estate agent collects from the seller. The amount varies from company to company and state to state but they are commonly an amount that is 15% of the total real estate commission received by a real estate agent.
Where does the cash come from for the homebuyer rebate?
Homebuyers who have a real estate agent represent them in the sale of their home can take advantage of a state refund program. Depending on where you live, the rebate is typically equal to or greater than your real estate agent’s commission on the deal. The money comes from the seller’s agent, so it is a check that your agent receive and then pays you to offset the cost of that commission.
Why do buyer’s agents provide commission rebates?
There are many reasons to use a buyer’s agent when buying or selling a home, but there are two common reasons why they offer commission rebates. First, they want to prove that they can negotiate such a sizeable rebate that the client doesn’t even have to look at the commission being offered by another real estate company. Second, they want to prove their value as an agent by providing their clients with a higher than average commission rate, while only asking for their guaranteed minimum commission.
Rebates can be offered in a multitude of ways; some firms eliminate commissions on sales that close during a set time period, while others might give rebate checks at the closing table or even credit the amount back to your closing costs. Each broker has the option to decide if the rebate will be paid at closing or upfront.
What sorts of homes are elegible for a homebuyer refund?
Homebuyer rebates are a great way to get money back on the type of home you want including condos, single-family homes, multi-family homes, and townhomes. Some restrictions and limitations may apply, so be sure to look into all the rules and regulations before deciding if a homebuyer refund is for you.
Homebuyer refund programs sounds like a simple concept, but do your research to make sure you are getting the most money back. There are companies that require a minimum net commission to be paid out for them to give you a refund. Also, most of these refund amounts vary based on purchase price, so calculate your amount before choosing a homebuyer refund company!