All you need to know about the home rebate and how does it work

It is the wish of nearly every person to one day buy and own a house of his own, but unfortunately, houses are probably the most expensive purchase decision that a person has to make. The affluent people have little to worry and can buy any home they like without any hassle. The less fortunate homebuyers have to rely on home loans and other options which can ease the process of buying a house.

Many aspiring homebuyers depend on home loans with easy terms or a purchase deal that can allow them to save a little portion of the money. One of the effective and easy ways for homebuyers to save money while buying a house is through a ‘home buyer rebate.’ When a person buys a home, a considerable portion of the purchase price is given off as commission to the real estate agents who have played a part in closing the sales deal. The real estate agent from the homebuyer’s side called the buyer agent would get 3% of the home purchase price, which he can give it to the homebuyer at closing.

The home buyer rebate is also called commission rebates and usually a fraction of the real estate agent that can result in thousands of dollars returned to the homebuyer. In simple words, a home buyer rebate is a money that will be refunded to you as a homebuyer at the closing. The home rebate is legal and allowed in 40 states of the country and as an opportunity to help homeowners save their expenses and move into a new house

Why would a real estate agent refund money to you?

There are several reasons a real estate agent would offer you a rebate. One of the main reason is that the real estate agent wants to give an incentive so that you chose his services among other real estate agents. Buying a home seems to be an easy task, but it can be a complex, challenging and tough process particularly for the first time homebuyers. But, the professional real estate buyers make use of technology and advanced solutions to streamline their process and efficiently fulfill the requirements and needs of the homebuyers. The use of internet and smartphone applications has allowed many real estate agents who work freelance to save their operating expense. As the expenses of the buyer agents want, they are willing to pass the commission they earn at the closing to the homebuyer.

How does the home buyer rebate work?

A home buyer rebate is the portion of the purchase price that the buyer agent receives from the seller at the closing, and he is willing to offer the received portion to the homeowner. The standard fraction of amount offered by most buyer agents is between 2% to 3%.

Let’s assume that you have purchased a home for $400,000. The seller of the house would pay 6% or $24,000, which would be split between the listing’s agent and the buyer’s agent. Traditionally, the 6% is distributed equally with 3% to the listing agent and 3% to the buying agent. The buyer agent would then give 1% of the commission to you which would approximately be $4,000 and also equivalent to 1% of the purchase price.

As a homebuyer, you can use the rebate amount in down payment, payment of closing costs, to purchase points on the mortgage and even to receive rebate as cash at the closing. But it is to be considered that if you are using mortgage loan then the mortgage lender will decide on how you use the home rebate amount. Many of the mortgage lenders usually do not allow homebuyers to take cash at the closing.

The home rebate is very effective and helpful if you want to buy an expensive house or want to save some amount on the down payment for your house. From a seller’s perspective, a home rebate is a valuable tool that buyers can use to select from the competitors. If the house is listed at $400,000, then the buyer agent receiving the rebate money can offer you more. Some of the common ways that homeowners use the commission rebate are

  • Reduce the closing costs
  • To buy new carpets, curtain, countertops or other household appliances
  • To perform some home improvement

You need to interview multiple real estate agents and select the best candidate who is willing to negotiate with the seller not only for the sale of the house but also on the commission amount. It is best to employ services of freelance real estate agents as they have little expenses to pay such as overhead costs and they also do not take any transaction fees.

Author Bio:

Stuart Johnson has got valuable experience working in the real estate industry. He is currently helping people to buy extravagant and lavish properties in MacDonald Highlands. He is also offering a considerable home rebate amount to convince the aspiring homebuyer.