What is a real estate commission rebate?
Real estate brokers are paid a sales commission based on the purchase price of the home. The commission is usually based on a percentage - for example, a buyer's broker receives 3% of the purchase price as a commission.....on a $100,000 home, the buyer's broker would receive $3,000.00 for helping the buyer purchase the home.
A "rebate" occurs when a buyer's broker shares a portion of his/her commission with the buyer. The rebate is paid to the buyer upon the successful completion of the purchase process which is known as "close of escrow."
Champion Realty rebates 50% of the commission to AZ home buyers on new homes purchased through us.
How do real estate brokers get paid?
New Homes - offered by home builders.
Home builders employ salespeople to represent them. The builder pays these salespeople a salary and/or a commission. Builders also offer a commission (usually 2% to 3%) to brokers who represent buyers.
It's been estimated that 70% of all new home buyers are represented by a buyer's broker. So home builders have a "one-price" policy. Buyers pay the same price for a new home whether they are represented by their own broker or decide to deal directly with the builder's salesperson. If a buyer deals direct, the builder pockets an extra 2% to 3% profit because the buyer did not have representation.
The commission amount to buyer-brokers is paid on the base purchase price of the home excluding options, upgrades and builder incentives.
How much do real estate brokers earn?
Commission amounts can vary depending on the home builder. The amounts paid to buyer-brokers usually range between 2% and 3% but occasionally bonuses are offered. Be sure to ask your broker and/or the builder what the commission amounts are on each home.
How does a commission rebate benefit the buyer?
Rebate brokers agree to share their sales commission with the buyer. Champion Realty offers a 50% rebate. If we receive a 3% commission, 1.5% is paid to the buyer at closing. Example - on a $100,000 home purchase, the buyer will receive a $1,500.00 rebate.
Do I have to use a certain lender to receive a rebate?
New home builders usually offer financial incentives for you to use their affiliated lenders - those incentives are very attractive and hard to pass up. But you are free to use your own lender if you choose but the builder won't offer the incentives. You can, however, use the commission rebate in place of the builder incentives.
Is there any incentive for me to deal directly with the builder's representative on a new home?
Absolutely not! If you deal directly with the new home builder's salesperson, the home builder retains the commission they would've paid the buyer's broker which increases the builder's profit.
You are literally throwing money away if you don't use a rebate broker to purchase your new home. You will pay the exact same price whether or not you use a rebate broker.
Is your rebate guaranteed in writing?
Yes! Upon request, we'll provide a signed guarantee certificate to you.
Are commission rebates legal in AZ?
Rebates are legal in Arizona and 39 other states. They are approved by the United States Department of Justice and the Arizona Department of Real Estate.
Scott Clayton * Champion Realty * 480-216-8668
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