What properties qualify?
The rebate is available on all new construction homes, town homes, condos and building lots that are available in the MLS and on many that are not listed, as long as the Buyer’s Agent commission is 3% or higher.
Where does this money come from?
Every brokerage has a different set of rules on how the commission rates are set, or how much they charge a seller (home owner, builder or developer) and how the commission is split between the listing agent’s brokerage and the buyer's agents brokerage.
On most new construction, the developer uses an outside brokerage or may have their own "sales team" in-house. Either way they pay a commission to any licensed Buyer's Agent. If you don't have a Buyer’s Agent the entire commission is still paid to the seller's agency who represents the developer's best interests, not yours! Always have a Buyer’s Agent!
Most commission rates paid by the developer or builder to the Buyer’s Agent are typically 3.0% – 5.0% of the total sales price. Some commission rates are lower, some are higher.
Does the seller need to agree to this rebate?
No – Texas state law allows our agents to credit back as much of their commission as they like to a buyer, as long as it is clearly outlined in the HUD, and the lender is aware.
How much rebate ("cash back") will I receive?
If we represent you as your Buyer's Agent, you will receive 1% of the purchase price as long as the total commission paid to our brokerage is at least 3% of the total sales price. Your agent will let you know your rebate amount before making an offer.
When will I receive the "cash back" rebate?
We credit all cashback disbursements at closing, as required by Texas state law. All commission reimbursements will be clearly disclosed to your lender, the seller and the title company. It is effectively a reduction in the price or a payment towards the buyers’ expenses associated with the purchase of the property that are shown on the closing statement. So it reduces the amount of cash you need at closing.
What are the requirements and restrictions?
Texas real estate brokerages and agents who represent the buyer in a transaction may rebate part of the commission they receive from the seller so long as the following conditions are met:
1. the Real Estate brokerage (not just the agent) must allow their agents to give rebates or payments to their buyers. WE DO!
2. If the buyer finances the property through a mortgage broker or banker, the buyer must disclose the rebate or payment to the lender early in the loan process as the rebate may impact the lender's loan to value (LTV) calculations. These calculations could impact the buyer's eligibility for the loan or may limit the amount of the rebate or payment. Failure to disclose may constitute loan fraud.
3. The rebate or payment must be disclosed on the settlement statement, typically as a "buyers agent commission rebate" on lines 204 to 209 of the Settlement Statement (HUD-1). Failure to disclose may constitute loan fraud.
What can I use the rebate for?
You can use the money you save for anything you want, but, if you finance your purchase, the lenders / underwriters generally will not allow the rebate to be used towards the down payment. For example, on a 10% down mortgage, the buyer must provide all the funds for the 10% down payment.
Most lenders allow the rebate to be used for any expenses the buyer has associated with the purchase of the property that can be shown on the HUD-1 closing statement including pre-paid fees and closing costs. Unless the seller is paying all the closing costs there are usually enough costs to cover the rebate.
What do I need to do to make sure I can get the rebate?
First, you may not have a exclusive buyer's agency agreement in place with another real estate agent restricting you to work with them.
Next, if you are being relocated by your company, either as part of your agreement with your company or with their written permission, you must be allowed to chose your own buyers agent (not just from their list). If we are required to pay a percentage of our commission to a relocation firm as part of your relocation agreement, we will be unable to offer the 1% cashback rebate.
How can you afford to rebate 1% of the purchase price?
We do NOT cut corners and we provide "full service plus" to our clients! However, by working with you as your partner, by using state of the art technology and by eliminating overheads, we have driven down the cost of doing business, and we are able to pass those savings along to you.
Will you commit to my program in writing?
Yes. We will put the commitment in writing in the BUYER REPRESENTATIVE AGREEMENT that we both sign. We will review this in detail during our first face-to-face meeting.
Can I get more information on your 1% CASHBACK rebate program for buyers of new homes and building lots?
Call us today at (214) 754 7040 and ask for a new home specialist, or fill out the simple form below and we’ll be in touch soon!
