What is a homebuyer rebate/cash rebate? Homebuyer rebate/rebate is a rebate given to a homebuyer by a realtor, of the commission received by the realtor calculated on the purchase price of the home.

How a homebuyer rebate program works: Typically, the real estate agent receives a 3% commission on the purchase price of the home from the seller. When the sale is complete, the Title Company gives the 3% commission to the Real Estate Agent. The real estate agent can then provide the refund to the buyer. The real estate agent gives a cash rebate to buyers who are experts in their search and have a short list of houses they want to preview.

An example of the rebate: If the buyer is purchasing a home for the purchase price of $250,000, the typical 3% commission the real estate agent receives calculated on the purchase price of the home is $7,500. The Realtor may refund a portion of the $7,500 commission received from the seller. If the rebate is 2% on the $250,000 house, it would be $5,000.

Since the real estate agent is giving the buyer a refund, it should be reported in the Good Faith Estimate. If the buyer is financing the purchase of the home, it must be approved by the lender, depending on the lender’s regulations.

The amount of the refund is based on the agreement between the buyer and the real estate agent. The agreement to grant a rebate and the percentage of the commission awarded as a rebate is agreed upon between the Buyer and the Real Estate Agent prior to the initiation of the Buyer-Agent relationship.

How can the real estate agent afford to give a refund? The search to buy a house has changed since the beginning of the Internet. Today, buyers can search for homes on the Internet; see photos of the houses and details of the houses that interest them.

Home buyers have some access to MLS information for home listings and can shortlist the homes they are interested in from their internet search. They do not require a real estate agent to know the basic details of the houses they want to preview because they can learn more about what a house looks like through the images and read the basic details of the house provided by the MLS on the internet. . By not having to show every home the buyer is interested in, the real estate agent saves money and time and can focus on negotiating the best price for the home with the seller. Because of the savings in time and money, the real estate agent can pass the savings on to the buyer.

Conditions for Reimbursement: Each Realtor has different conditions to reimburse part of the commission received. He must consult with the real estate agent individually and confirm the terms directly with the real estate agent. The terms must be signed by both parties before the agreement is valid and for you to get a refund. In general, these are the guidelines that the real estate agent follows:

1. The Rebate is a portion of the commission percentage that the Realtor receives on the purchase price of the home. The real estate agent may receive a minimum percentage of commission to give you a refund.

2. The lender must approve the repayment if the home is financed. Most lenders usually approve the repayment. However, if the lender does not approve it, he will not receive a refund.

3. The maximum list of shortlisted houses to preview is usually 15 houses.