What is a Homebuyer Cash Back / Refund? The Home Buyer Refund / Cash Refund is a refund given to the home buyer by a real estate agent, of the commission received by the real estate agent calculated on the purchase price of the home.
How a homebuyer rebate program works: Typically, the real estate agent receives a 3% commission from the seller on the purchase price of the home. When the sale is complete, the title company disburses the 3% commission to the real estate agent. The real estate agent can then provide the buyer with the refund. The real estate agent offers a cash back to buyers who are skilled in their search and have a narrow list of homes they want to preview.
An example of reimbursement: If the buyer is buying a home for the purchase price of $ 250,000, the typical 3% commission that the real estate agent receives calculated on the purchase price of the home is $ 7,500. The agent Realtor can refund a portion of the $ 7,500 commission received from the seller. If the refund is 2% on the $ 250,000 house, it would be $ 5,000.
Since the real estate agent is granting a refund to the buyer, it must be disclosed in the good faith estimate. If the buyer is financing the home purchase, it must be approved by the lender, depending on the lender’s regulations.
The refund amount is based on the agreement between the buyer and the realtor. The agreement to grant a refund and the percentage of the commission awarded as a refund is agreed upon by the buyer and the real estate agent prior to initiating the relationship between the buyer and the agent.
How can the real estate agent afford to give a refund? The search to buy a home has changed since the beginning of the Internet. Today, buyers can search for homes on the Internet; See photos of the homes and details of the homes that interest you.
Home buyers have some access to MLS information from home listings and can shortlist the homes that interest them 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 pictures and read the basic details of the house provided by the MLS on the Internet. By not having to show all the houses the buyer is interested in, the real estate agent saves money and time and can focus on negotiating the best price for the house with the seller. Due to the saving of time and money, the realtor can pass the savings on to the buyer.
Conditions to receive a refund: Each real estate agent has different conditions to refund a part of the commission received. You should check with the realtor individually and confirm the terms directly with the realtor. The terms must be signed by both parties before the agreement is valid and for you to get a refund. These are generally the guidelines that the real estate agent follows:
1. Reimbursement is a portion of the percentage commission that the real estate agent receives on the purchase price of the home. The real estate agent may receive a minimum commission percentage to grant you a refund.
2. The lender must approve the repayment if the home is financed. Most lenders generally approve the repayment. However, if the lender does not approve, you will not receive a refund.
3. The maximum list of households to preview is usually 15 households.