Many buyers are looking for ways to stretch their dollars far enough to make this dream home a reality in today’s tight housing market. The home buyer rebate is one unknown tactic that is gaining popularity among consumers. At the same time, rebates for the mainstream real estate industry. have become a hot-button legal issue. Home Buyers Birmingham
Consumers enjoy buyer rebates, at least those who know about them, because they can make it more affordable to get into a house. More and more so-called non-traditional real estate companies— those offering alternatives to full-service, full-commission brokers— are offering to share with buyers their paydays. At the same time, in the form of commission discounts, most conventional brokers across the nation are attempting to block rebates as they threaten fat margins with price competition.
In addition to down payments, as consumers pay the lion’s share of closing costs, many are interested in receiving rebates to alleviate the cash crunch of moving into a new home. This can be a real benefit to buyers with a solid income and credit history, but a small amount of cash up front.
Some buyers seem to find the rebate process confusing because it runs counter to the common belief that home buyers are not paying commissions on property. In reality, as part of the purchase price of the home, commission costs are passed on to buyers. Typically, buyer agents are paid half the standard 5-6 percent commission on sales prices. The money doesn’t come from thin air… chances are the sellers ‘ profit has been factored into their price. If typical listing agents advise sellers not to fear commissions because they can recover the costs by a higher selling price, someone pays the freight.
At the same time, buyers are searching for rebates to help ease the high cost of home buying, conventional real estate brokers are trying to prevent their use – and often succeeding. Broker lobbying groups across the nation, concerned with price competition and downward commission pressure, have successfully lobbied lawmakers in 10 states to illegalize home buyer rebates.