How do rebates work?
Some real estate brokers offer consumers cash refunds or non-cash incentives to encourage them to use that broker’s services. Rebates are typically cash payments from the real estate broker to his or her client after closing. Incentives may include gift certificates, closing-cost payments, or free ancillary services such as home inspections or moving services.
How do rebates benefit consumers?
Rebates can save consumers several thousand dollars in a single transaction. For example, if a broker offers to refund one-third of its commission to the homebuyer, the average buyer of a $300,000 home could save $2,500 to $3,000 (based on the 2.5% to 3% commission rates typically earned by the buyer’s broker).
Incentives, such as gift certificates for a home inspection, merchandise at a nearby hardware store, or moving services, give consumers monetary benefits from the transaction that they otherwise would not have obtained.
Offering rebates and incentives is one way that real estate brokers can compete for consumers’ business, leading to lower prices to consumers.
Buyers should always be reminded credits are now capped under federal lending guide lines and ANY deviation above those limits can result in fines and prison time for both agents and their clients.