First time Buyers, remember to negotiate Real Estate Rebates. Every little bit of savings helps!

Re: First time Buyers, remember to negotiate Real Estate Rebates. Every little bit of savings helps!

• JoanE2012 member

  

  November 2014

  The link is for an article entitled "7 Traits of Highly Effective LA Real Estate Rebate Realtors".  Is LA Real Estate Rebate Realtors" the name of the company?  If so, I think they need a better name.  And a better writer.  No wonder why they have to give rebates, they probably wouldn't have any business otherwise!

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• scotter77 member

  

  November 2014

  The real estate industry has changed significantly with the increased transparency and access to MLS data online. As a buyer or seller, why wouldn't you want to find a Realtor that can handle the transaction well and do so at a lower cost?

  
  

  Would love to hear your thoughts.

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• JoanE2012 member

  

  November 2014

  Of course, scotter, however the business name is far from original and the articles on the website look like they were written by someone in high school.  Not a business I would want to entrust with my home purchase experience.  I hope you're not affiliated with them!

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• Sisugal member

  

  November 2014

  Generally the seller pays the realtor fees, not the buyer.
  

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• scotter77 member

  

  November 2014

  Correct Sisugal, but buyer is also paying a 5% premium (assuming 2.5% each side) for a home which translates to a larger principal/loan balance and ensuing interest over the life of the loan.

  
  

  As a buyer, you're also paying a number of out of pocket closing costs and fees. Why not reduce/offset to minimize all the fees. Why else do companies like Redfin exist and offer such high rebates? It's similar to buying a stock and paying a $6.95 fee to the brokerage. Would be great to acquire the stock sans fee right?

  
  

  Just some thoughts to foster discussion.

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• Sisugal member

  

  November 2014

  scotter77 - please explain the 5% premium. I am not understanding what you are saying.
  Are you saying that the house sales price is boosted by 5% because of the buyer needing to pay a realtor?
  There is NO split on a realtor's cost in my area - the seller absorbs it all.
  Prices for a home are limited by comps
  Of course as a buyer you pay for some closing costs as does the seller (and in our area sellers are not contributing to buyer's closing costs - but that varies by location and the local market)
  
  I have bought 2 houses, sold one. I expect to pay my closing fees in either case.
  A good downpayment, good FICO score and good DTI along with buying a home that is reasonable for your budget are key components to successful home buying.
  
  

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• scotter77 member

  

  November 2014

  Happy to explain Sisugal as you raise a great teaching point.

  
  

  Sellers absorb the entire 5% commission when they hire a Realtor. True. In turn, that Realtor (listing) splits that 5% commission with a Realtor who procures a buyer when the property is listed on the MLS (multiple listing service). Sometimes, that listing Realtor will procure a buyer and benefit from both sides of the transaction 2.5%(representing seller) + 2.5%(representing buyer) in a dual agency.

  
  

  You are correct that the Seller pays the 5% commission, but from another perspective, that same buyer is paying 5% more than they had to, if a RE agent wasn't involved.

  
  

  Now, we're not saying that a Realtor doesn't offer value. Quite the contrary, as they offer a service to manage the transaction and serve the client for a reasonable fee. We're simply proposing that it's possible to reduce that "fee."

  
  

  And yes, closing costs are part of any real estate transaction when you factor in lenders, title companies, escrow, etc. But as a seller, isn't it best to reduce the transaction costs as best you can and as buyer, wouldn't you want to offset as much of your costs as possible?

  
  

  This isn't a new concept and has actually existed for quite some time. Now, with competition increasing, agents more publicly advertising. Simply google "rebating Realtor" or "real estate rebate" and you'll find an abundance of quality Realtors offering incentives.

  
  

  Savvy, proactive and experienced buyers and sellers like yourself are exactly who they hope to target and appeal to.

  
  

  Ultimately, it's about educating and empowering all parties to make informed decisions.

  
  

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