What Is a Buyer Commission Rebate?
Every penny counts when you’re trying to purchase a new home. You’ll want to know more about maximizing your savings to get the house of your dreams. One way to save money that most people don’t know about is the buyer commission rebate.
So, what is the buyer commission rebate? If you want to learn more about this, keep reading!
Buyer Commission Rebates Explained
A buyer commission rebate is offered through the buyers’ agents. It’s a form of customer incentive to make buying the house through the agent more appealing. After the closing, the agent refunds a percentage of their fee back to the buyer.
Essentially, the buyer receives a portion of the agent’s commission from the sale. Some agents use it to attract new customers and stand out from their competition.
This rebate has other names, including buyer cash back and buyer rebate. The rebate is usually used at closing to pay your closing costs and prepays saving you thousands in fees.
So, now that you understand what a buyer commission rebate is, how can you get one, and what benefits does it have?
How To Get a Buyer Commission Rebate
You can get a buyer commission rebate through agents that offer them. Some will advertise this benefit online. You can also ask the realtor if you’re unsure whether you can receive a refund from them.
You can always try negotiating with the agent if they don’t offer one. Simply ask if it’s possible to receive a buyer commission rebate. However, you’ll need to be ready to give them something in return, like doing most properties research yourself.
If you don’t want to negotiate, you’ll need to find a service where agents are more willing to offer these rebates to stand out. For example, there are sites where you can contact realtors. These places are more likely to have buyer commission rebates available since the realtors are competing for your business.
Many buyers prefer that option because they don’t need to negotiate with the realtor.
Overall, there are a few ways that you can get a buyer commission rebate. You’ll need to know where to look or feel comfortable asking the agents about it.
What Are the Benefits of Commission Rebates?
You’ll also want to make sure that you understand what the benefits of commission rebates are. That way, you’ll know why they’re good to seek out.
Let’s break down all of these benefits below.
You Save Money
The most important benefit to most people is that you can save money with a commission rebate. You can use the money you get back for home improvements or to lessen how much you must put toward closing costs from your pocket.
Any way that you can save money is good when it comes to buying a house.
You Get More Purchasing Power
Next, you can get a bump in purchasing power. If there’s a home that’s just slightly above your budget, knowing that you’ll receive a specific amount back might be able to help you buy that home.
You also get more negotiating power from rebates since you can use them when talking with sellers. That means you can get several benefits, such as better mortgage terms.
Overall, you can consider the rebate as extra money to use on paying for the house, allowing you to have more purchasing and negotiating abilities.
You Can Use Them on Anything
Lastly, you can use the rebate to pay for anything since it’s your money. Many people use it to fund buying new furniture or paying for renovations. Still, you can use it on whatever you want.
The money you receive isn’t limited to spending on the house unless you receive a discount for something from the agent. Since you will save thousands in fees you otherwise would have had to pay you are essentially freeing up your own cash to do as you please.
What Else To Know About Commission Rebates
There are a few other considerations that you’ll want to know about commission rebates. While they can provide many benefits, you’ll need to learn more about the laws in your area since they can vary.
Each state has different laws regarding commission rebates, so you’ll want to know exactly what you’re getting into.
Next, you also want to ensure you’ll still receive quality service from the agent. It’s essential to read reviews about them online and research realtors. That way, they aren’t offering rebates to compensate for their lack of customer service skills.
How Buyer Rebates Work
Once you complete the closing, the agent will offer you a percentage of the sale price. So, if you have a 0.5% rebate offer on a $250,000 house, you’d receive $1,250 back. Or, they may offer you a percentage of the commission they made, which can be harder to figure out.
For example, an agent gets a 3% commission on the home and offers you a 25% rebate. That means you’ll receive a quarter of the final commission. In this case, that would be $1,875.
You can figure it out by determining the agent’s commission price from the sale (3% of $250,000 is $7,500), then figure out the rebate using the percentage offered (25% of $7,500 is $1,875).
Estimating what you’re getting from the rebate is a good idea to see if you’re getting a good deal. You can also use a calculator.
Do All Houses Qualify for a Home Buyer Rebate?
All homes can qualify for a home buyer rebate if the laws in your state allow it. Depending on the agent’s offers, you’ll want to ask them questions.
For example, most will offer them for single-family homes, but only some will offer these rebates for apartments. You’ll want to ensure you talk to them about what homes you’re looking for.
Look For Buyer Commission Rebates
Now you know to look for these rebates when you’re house hunting. They can help you save a lot of money, allowing you to afford the house you want the most.