Frequently Asked Questions – Answered…
Who really pays the Buyer’s Agent commission? Typically the Buyer’s Agent is paid the commission offered by the Seller or the Seller’s Agent in Realtors’ MLS system. Since the Seller agrees to the amount being offered in the Multiple Listing Service, they are well aware of the cost involved and can certainly adjust the price they are asking when they sign the listing agreement. Since the commission is included in the price the buyer pays for their property, it can be said that the buyer is indirectly paying the commission offered to the Realtor MLS system. Some Buyer Agents say there service are free, which is not accurate and the US Dept. of Justice is enforcing total transparency on this.
What is a Real Estate Rebate or Home Buyer Rebate? Also known as an “Agent Commission Split” a rebate can be considered a business strategy and a generous act by a Buyer’s Broker to share a portion of the commission with their Buyer Client. A Buyer Broker’s or Buyer’s Agent who provides a real estate rebate typically does so to reward the Buyer for the time the save them by doing some of their own “homework” such as online real estate research and property searching. A rebate is typically shown as a credit to the buyer at closing so that the buyer needs to bring a lot less money to the closing table.
Are Home Buyer Rebates considered Taxable Income? According to the IRS, the answer is no. The Internal Revenue Service considers a rebate paid to a home buyer an adjustment to the price of the property purchased, and therefore not taxable income to the home buyer.
Are rebates available in all US States? According to the U.S. Department of Justice, real estate rebates (aka; Credits to the Buyer) at closing are currently available in 40 states. The Department of Justice like that some Realtors will compete for home buyer business by refunding a portion of their commission as a rebate. Rebates are not yet available in Alaska, Alabama, Iowa, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee. But since their combined population is only about 12% of the USA, then about 88% of the population can have access to a real estate rebate in their hometown or destination city.
How do I find Realtors who give real estate rebates? There are several Online Real Estate Networks that can direct you to Realtors who offer Rebates. Most of them require realtors to pay them a “referral fee”. The Real Estate Savings Center doesn’t charge Realtors a referral fee, and it offers Realtors free online marketing so they can afford to offer the consumer the higher real estate rebates
Can I negotiate a Home Buyer Rebate from a New Home Builder? You can certainly try. However, most Builders are making the MLS offer of compensation to Realtors because they want them to bring them their Buyer “Clients”. They want the Buyer’s Agent to take some of the legal responsibility of getting the Buyer to the closing table. Plus, Home Builders are typically already offering some type Buyer Promotions like Free Home Upgrades, paid closing costs, or discounted Financing Options, etc. You will do much better with your own Buyer’s Agent who offers a split of the MLS commission offered by the Builder.
How do I benefit from a real estate rebate as a Seller? The largest cost of selling a home is normally your mortgage payoff. Second, highest cost is the Listing, Marketing, and Selling Fee paid by the listing Agent. Instead of just looking for an Agent who rebates part of a 5% to 7% fee, it is best to compare Realtors offering “Full Service for Less”, and “Fee for Service” Listing Solutions. Today the Internet helps you find the Real Estate Companies that offer you the services you want for the fee you are willing to pay. The Real Estate Savings Center is one of those companies.