This topic comes up often and many often turn to sites like Yelp, Angie’s List or through personal referrals. The answer is all of the above and interview/negotiate with everyone. The advertised rebating realtor may not be able match the savings incentives from a competing “traditionally advertised” realtor. As with any industry, service is key and the more overhead the less likely there will be room for movement. Reach out to qualified, smaller scale, independent realtors and you’ll likely see more savings incentives.
The same goes for lenders as the bigger the name, oftentimes the bigger the hassle.
We’ve received a lot of questions regarding leverage once your offer has been accepted. The truth is, you’ll want to prepare in advance for your buyer’s inspection period. Hopefully, prior to submitting your offer, you’ve touched base with your preferred home inspector, termite inspector and contractor regarding their availability. In your offer, your realtor should have built in a inspection contingency period (which ranges by region) which is customarily 10 days in the Los Angeles area. Of course you can lower that number to make your offer more appealing but that’s a different topic to be discussed later.
Now that your offer has been accepted, it’s to your advantage to schedule all of your vendors to perform their services as early as possible into the contingency period. This buyer beware or due diligence period is extremely important and is your “out” for any reason. Thus, you’ll want to make sure your home inspector is EXTREMELY thorough and will provide you with a detailed report with explanations and pictures that can be easily fowarded via email. Here is when you want to go with quality of service over price (rest assured, a quality report will generate more net savings) as these reports and data will as your leverage to negotiate seller credits.
In summary, tip 1, reach out and build your preferred group of vendors. Home inspector, termite, contractor, plumber, rooter service technician, and if necessary a topography/geological survey specialist.
Tip 2, check their availability so that they are all available as soon as your offer is accepted so you can get everything done earlier on into the inspection contingency.
A number of clients have asked us in which areas do you see a rise of commission rebate real estate agents (say that 10x fast) and while you may think this is a new phenomena, it’s actually existed under the radar for many years. Now, agents are incorporating this historically friends and family discount directly into their business model and oftentimes their business names.
Knowledge is always power so in the past, an online, easily accessible (from a UX standpoint) directory of listings didn’t exist so agents controlled what properties were available for sale. Unless there was a huge sign in front of house, most buyers wouldn’t have the slightest idea.
Now, to go back to the original topic, the simplest answer are cities in which there are high property values, low inventory, job growth, specifically in technology/innovation, high concentration of college graduates and modern real estate development projects.Chances are if the homes are being marketed heavily online by developers and agents, savvy buyers in the area are going into the home buying process with knowledge of commission rebates.
Now, the question of whether going with a discount or rebating realtor with that discount in the name is a good idea is a different story, which we’ll tackle next time.
Many people have asked us how a commission rebate is applied as they want to make sure it isn’t taxable. Typically the commission rebate from your respective rebating realtor is applied towards your settlement or closing costs. If there is a remaining excess amount, we have it applied towards a reduction in the purchase price.
Some buyers have opted to have the entire commission rebate applied directly towards a reduction in purchase price but it’s a matter of preferences.
Feel free to visit other sites like redfin or rebagents.com to learn more about commission rebates in your area.