How Brokers Are “Faking” The Homebuyer Tax Credit
With the tax credit now off limits to anyone who did not manage to at least slide some paperwork in before the June 30 deadline, real estate brokers and agents are looking for other ways to attract buyers. One option that appears to be gaining in popularity is the buyer’s rebate. Buyer’s rebates can be offered by anyone, but frequently are offered by the agent or the brokerage to lure buyers.
The rebate usually takes the form of a small percentage of the total cost – for example, a 1% rebate on the purchase of a $250,000 house would equal a credit of $2500. While a buyer might be able to get this in cash, it is more likely that this money would be applied toward closing costs or other fees.
Have you encountered this practice, and has it helped you in any deals? Do you offer something similar to your sellers?
Thank you for reading! Your comments and questions are welcomed below.
I own a real estate brokerage in New Mexico and we do offer our some of our buyers a rebate of up to 2% of the sales price of the property. We recognize that many buyers, today, are searching for and finding property online. Since the buyer will spend hours of his or her own time looking for their next home, piece of land, or investment property, we think that they should be rewarded for their effort. The bottom line, as far as we are concerned, is:
If the buyer does the initial legwork, finds a property they would like to make an offer on, and then select Hardy & Company to represent them, we will rebate 2/3 of our commission at closing – this usually works out to 2% of the sales price of the home.
A couple of points need to be made about some of the “rebates” that are being offered. First, many companies who are offering rebates are forcing the seller to provide the rebate money – we find this despicable due to the thin margin most sellers are facing and the fact that the brokerages who use seller funds for the rebate are essentially using the seller’s money for their marketing promotion. The second point, that buyers should be aware of, is that not all states allow for a rebate. The Department of Justice has a great report that shows the states buyers can legally receive a rebate.
The final point deals with the title of this blog posting. I take exception with the “faking” language as my company is certainly not trying to fake any sort of credit. We are simply trying to adjust our fees in light of the changing way people are searching for real estate.
Steve Hardy
President & Qualifying Broker
Hardy & Co. | Real Estate
http://www.Hardy-Co.com
What a nice post and what a great way to attract buyers. It shows that Steve is very progressive, something that we all need to keep in mind with these crazy times. So many are still holding onto “but three years ago my house was worth XXX”. It doesn’t matter now and we all need to be more creative and flexible. Way to set an example Steve!