Home buyer's commission refunds make homeownership more affordable.
In 40 US States, real estate law allows home buyers to negotiate a refund with their own real estate agent. A buyer’s rebate is the exact same thing as a buyer’s refund, stated differently. A buyer’s rebate is typically negotiated as the percentage of the fee to be returned, and buyers refund is the dollar amount. The reason why the buyer’s rebate is often quoted as a percentage is that it is difficult to predict the exact commission amount buyer’s agent will collect after the transaction is closed.
Refund is the only mechanism available to buyers to negotiate commission savings. Buyers often can receive thousands, tens of thousands, and in extreme cases, hundreds of thousands in fees back from their own real estate agent. Buyer’s refund is the amount the buyer receives as their own money back from the buyer’s agent commission. If a buyer does not negotiate a refund, these potential savings are simply lost as an expense, merged into a final mortgage sum.
Receiving a refund is always a good idea, but finding a good balance, working with qualified and motivated real estate agent should always be your top priority. For some 10% rebate from a local agent is better than 50% rebate from an Internet broker; for others, the rebate amount may govern.
You may find referral fee companies who offer to find you refunds, but these savings are highly be diluted and biased with 25%-40% referral fees. The best way to negotiate a refund is with an agent directly or using a 0% referral fees Open Real Estate Marketplace™.
Home buyer’s refunds is an effective financial incentive available to real estate agents as a way to retain more clients. In the modern Internet economy, non-traditional transparent marketing now allows for real estate agents to offer flat fees and commission refunds without being seen as "discount brokers." Instead, real estate agents who choose to embrace savings as part of their business model, inevitably build trust with their clients.
When openly negotiating with clients, competitive real estate agents actively engage in transparency and value-added services, in lieu of "standard" offerings.
As a home buyer, your window to negotiate a buyer’s refund with a real estate agent is prior to entering into a representation agreement. Once the representation agreement is signed, it is unlikely that your agent will be willing to re-negotiate for a reduction of their fee.
At HomeOpenly we maintain an Open Real Estate Marketplace™ that aggregates buyer’s refunds from local real estate agents for over 147,000,000 homes in the United States. HomeOpenly is absolutely free to you and qualified competitive agents willing to participate. There are absolutely no referral fees or any other costs to you or the agent when using HomeOpenly service.
There are zero disadvantages entering into a refund agreement with a fully qualified, licensed and motivated real estate agent. As a client, you are not allowed to do any work in exchange for receiving a refund, no matter how insignificant. It is unlawful for real estate agent to require that some work is done by you, quid pro quo.
Real estate agents who offer refunds may and often do propose some cost-saving measures to you, but you cannot and should not be expected to complete any of the work. Buyer refund is a purely financial incentive, very similar to receiving any other type of a service or product cash incentive, such as a car manufacturer's rebate.
In 2007 the IRS has ruled that that commission refunds to home buyers are not taxable. The IRS position is that payment or credit at closing to the home Buyer represents an adjustment to the purchase price of the home and generally is not includible in a home Buyer's gross income.
The IRS centers its reasoning on similar cost-saving options available for consumers in other industries, such as when an auto purchase manufacturer offers rebates and similar financial incentives that represent an adjustment to the purchase price.
IRS private ruling does not determine the tax situation of each home buyer, but clearly outlines the reasoning why a real estate agent is not obligated to report a buyer's refund as income. Based on this ruling, a real estate agent does not have any grounds to issue a 1099-MISC to a home buyer who receives a refund.
Now is the time you can actively engage your new real estate agent in a search for a home. Keep in mind that your buyer's refund will be available to you after the transaction is closed and your agent gets her commission check.
This money you are getting paid back to you is not magic – it is, essentially, advanced to you from the total mortgage sum, and requires a lender approval, because most home sales are financed. Having a negotiated refund in your representation contract allows you to be in a better financial position when making your best offer on a home.
Finding a perfect home means different things to each person, but usually, a successful process requires you to make calculated shifts in priorities.
At HomeOpenly, we’d like to guide you to an opportunity of homeownership as a transparent, affordable, and open experience.
Open Real Estate Marketplace™ is an unbiased Internet database for your local real estate agents to offer you the best representation and buyer’s refunds without any referral fees or other costs. HomeOpenly operates with independent ads and Network Effects in order to develop healthy competition in key Business-to-Consumer (B2C) homeownership verticals across 147,000,000 US homes.
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Feel free to contact us if you need further assistance. At HomeOpenly we aim to make the opportunity of homeownership transparent, affordable and an open experience.