What Is A New Home Rebate?

Home rebates have become much more popular to offer as an incentive to home buyers in the last decade. Brokers do this for many reasons, often to gain new customers by incentivizing them with a solid rebate deal. Not all brokerages offer this incentive, so if you’d like to pursue this opportunity for yourself, contact us anytime by visiting our contact field. But what is a rebate? This is exactly what we are going to cover in this guide, to help you decide if this is a good option that will land you with not only a house, but also more money you could use to invest into your home, such as upgrades, closing cost — or even personal interest, of course.

What Is A Home Rebate?

Home Rebates are essentially a payment to the home buyer that is usually 50% of the commission earned by the real estate agent. This means that when you buy a house, then you will be paid or refunded half of what your real estate agent has earned. 

For example, if you purchase a home that is worth $300,000, and the buying and selling real estate agents earn $6,000 ($3000 each) from their 6% cut (3% each) in commission, then you will be paid back $1500 of this after that 6% is split between the buying and selling agent, which equals out to 1.5%. 

A more in-depth way of looking at this would be another example: the buyer’s and seller’s agents together earn a 6% commission of the sale price, which is then split up between the two agents. It’s then divided once again, only this time you and the agent will get 50% of that 3% left after the two agents have split the overall commission by 50%. The percentage in terms of commission may differ in some areas, but the 6%/3%/1.5% is what can be expected most of the time. 

Why Do Brokers Offer Rebates?

Rebates have become extremely popular, especially after the market crash a little over a decade ago. This was to give the buyers an incentive to use certain brokers over others, those who have higher incentives; which may be a higher rebate than their competition. 

This helps the agent have a higher rate of success in terms of the quantity of clients they are able to get. Due to the agents having a higher number of clients, they are able to lower their commission percentage as a result from the increased number of clients. 

This not only helps the real estate agent make more money themselves, but also helps the buyer have more money after the home purchase to spend on whatever they choose, including investing this back into the house itself. 

What Types Of Homes Are Rebate Eligible?

This is often a question that many have, and rightfully so. While most home purchases will likely be either a single family home or condo, it is not rare for people to buy mobile homes or multi- family properties as well. 

Luckily for everyone, brokerages will have rebates on many types of properties, such as condos, single-family homes, and even mobile homes — plus more. This, however, does largely depend on the particular brokerage, so make sure to do your research before you decide the type of property you are interested in is not rebate eligible with your newfound brokerage. You don’t want to get halfway through this process, only to be told rebates are not available on your preferred property type.

Words of Advice 

Do Your Research 

Rebates are without a doubt a fantastic opportunity to take advantage of, but before you bite the golden bullet, you may want to do your research to ensure you are getting the best deal possible. 

Not all brokers will offer what you are looking for, so before you pick an agent and begin the process of looking at homes, make sure to look into what the broker offers, so that you don’t waste your time and decide to change brokers later. 

Above all, make sure that you don’t settle with the first decent deal you see. It’s best to go through at least a few different options before you make your final choice, if only for the sake of comparison. However, this could very well save you a considerable amount of money and a headache in the long run.

Read The Fine Print

Once you find the agent with the perfect deal, make it a top priority to read the fine print. The fine print can include many different things that will not take you in good interest, including all sorts of fees and other things that could be taken from your split of the rebate. The fine print could also include many other things that negatively affect your rebate, so do not sign any agreement before you are familiar with the contents.

Overview

Home rebates are undoubtedly one of the best money back opportunities available when purchasing a home, and are often widely available, but not always common knowledge. Fortunately for all parties involved, this opportunity is becoming more popular, as this benefits both the broker and buyer. The 1.5% you will likely receive back may not sound like much, but considering it is likely taken from a hundred thousand plus dollar home, this will without a doubt be quite a bit; not to mention the potential rebate results on a much more expensive home. Feel free to contact us anytime if you have any questions, we are happy to assist you.