Irvine Pacific without Seller's Agent?

[bones]

If the buyer of new construction happens to be a RE agent or have a RE license, can the buyer claim the co-op directly?  A few weekends at a RE cram class, take the exam, and get $20,000 off your house?  Sounds like a deal to me.

But why bother?  There are agents out there willing to only take a couple thousand of the rebate and give you the rest. 

 

[qwerty]

Bones said everything I was going to say.

 

[rkp]

If the buyer of new construction happens to be a RE agent or have a RE license, can the buyer claim the co-op directly?  A few weekends at a RE cram class, take the exam, and get $20,000 off your house?  Sounds like a deal to me.

But why bother?  There are agents out there willing to only take a couple thousand of the rebate and give you the rest.

you wouldnt have to waste time going in with your agent.  feel like checking out a new model on a wednesday afternoon, just go and flash your biz card

i remember some developments not offering the co-op to you if the agent was the buyer but USCT and IR would know more about that

 

[Happiness]

Plus, with a RE license, you can go into the co-op kickback business yourself.  Forget the Pavilion Park, Stonegate, Woodbury, etc. "specialist", you can advertise yourself as Irvine's "New Home Kickback Specialist!"

 

[bones]

Bones said everything I was going to say.

Sorry bro. Shoulda just let you finish our same train of thought

 

[bones]

Plus, with a RE license, you can go into the co-op kickback business yourself.  Forget the Pavilion Park, Stonegate, Woodbury, etc. "specialist", you can advertise yourself as Irvine's "New Home Kickback Specialist!"

So you can park yourself at the parking lot in OH and approach model home go-ers with an eager smile?  Careful, they may think you're a homeless man and throw you their 85 degree scraps. Or are you going to sponsor TI and try to cut into the USCT and IR2 stronghold?

 

[Happiness]

Plus, with a RE license, you can go into the co-op kickback business yourself.  Forget the Pavilion Park, Stonegate, Woodbury, etc. "specialist", you can advertise yourself as Irvine's "New Home Kickback Specialist!"

So you can park yourself at the parking lot in OH and approach model home go-ers with an eager smile?  Careful, they may think you're a homeless man and throw you their 85 degree scraps. Or are you going to sponsor TI and try to cut into the USCT and IR2 stronghold?

To get the word out about the millions in kickback opportunities, I'd hire Tom Vu out of retirement to do some infomercials for me.

 

[rkp]

There are agents that hover in model home parking lots.  Seen first hand at Pavillion Park and OH.

 

[usctrojancpa]

If the buyer of new construction happens to be a RE agent or have a RE license, can the buyer claim the co-op directly?  A few weekends at a RE cram class, take the exam, and get $20,000 off your house?  Sounds like a deal to me.

But why bother?  There are agents out there willing to only take a couple thousand of the rebate and give you the rest.

you wouldnt have to waste time going in with your agent.  feel like checking out a new model on a wednesday afternoon, just go and flash your biz card

i remember some developments not offering the co-op to you if the agent was the buyer but USCT and IR would know more about that

That's correct, there are some builders that will not give a buyer the broker co-op if they are an agent.  Another thing that make a big difference that people don't think about is that if a builder let's you get the broker co-op if you are the buyer you'll have commission income which will be taxable (for lots of Irvine buyers the marginal tax rate on that income is about 40%).  Conversely, a commission rebate from an agent back to the buyer is NOT TAXABLE to the buyer.

 

[usctrojancpa]

There are agents that hover in model home parking lots.  Seen first hand at Pavillion Park and OH.

I've seen them too...kind of sad if you ask me. 

 

[irvinehomeowner]

There are agents that hover in model home parking lots.

 

[TRNeighbor.com]

If the buyer of new construction happens to be a RE agent or have a RE license, can the buyer claim the co-op directly?  A few weekends at a RE cram class, take the exam, and get $20,000 off your house?  Sounds like a deal to me.

But why bother?  There are agents out there willing to only take a couple thousand of the rebate and give you the rest.

you wouldnt have to waste time going in with your agent.  feel like checking out a new model on a wednesday afternoon, just go and flash your biz card

i remember some developments not offering the co-op to you if the agent was the buyer but USCT and IR would know more about that

That's correct, there are some builders that will not give a buyer the broker co-op if they are an agent.  Another thing that make a big difference that people don't think about is that if a builder let's you get the broker co-op if you are the buyer you'll have commission income which will be taxable (for lots of Irvine buyers the marginal tax rate on that income is about 40%).  Conversely, a commission rebate from an agent back to the buyer is NOT TAXABLE to the buyer.

Not sure I follow this logic.  If you, the agent, are giving your client money at COE, wouldn't it be recorded as income to the buyer? The lender (if any) has to be  notified of this "rebate", right? If so, then the paper trail has begun. 

I could see this working if you used their "rebate" portion towards their closing costs handled through escrow, but I'm pretty sure to outright give your clients money is either gonna cost them, or it's gonna cost you.

 

[qwerty]

Trneighbor - the IRS has ruled on this issue. A rebate from an agent to the buyer, whether through escrow or outside of escrow is not taxable to either the agent or the buyer. For the buyer it reduces the tax basis of the home. For the agent providing the rebate, the rebate is a deductible business expense.

 

[usctrojancpa]

If the buyer of new construction happens to be a RE agent or have a RE license, can the buyer claim the co-op directly?  A few weekends at a RE cram class, take the exam, and get $20,000 off your house?  Sounds like a deal to me.

But why bother?  There are agents out there willing to only take a couple thousand of the rebate and give you the rest.

you wouldnt have to waste time going in with your agent.  feel like checking out a new model on a wednesday afternoon, just go and flash your biz card

i remember some developments not offering the co-op to you if the agent was the buyer but USCT and IR would know more about that

That's correct, there are some builders that will not give a buyer the broker co-op if they are an agent.  Another thing that make a big difference that people don't think about is that if a builder let's you get the broker co-op if you are the buyer you'll have commission income which will be taxable (for lots of Irvine buyers the marginal tax rate on that income is about 40%).  Conversely, a commission rebate from an agent back to the buyer is NOT TAXABLE to the buyer.

Not sure I follow this logic.  If you, the agent, are giving your client money at COE, wouldn't it be recorded as income to the buyer? The lender (if any) has to be  notified of this "rebate", right? If so, then the paper trail has begun. 

I could see this working if you used their "rebate" portion towards their closing costs handled through escrow, but I'm pretty sure to outright give your clients money is either gonna cost them, or it's gonna cost you.

Qwerty explained it perfectly, but to simply it even more....ask yourself who did work for who?  Did the agent do work for the client or did the client do work for the agent?  Obviously the agent did the work for the client so the agent is the one earning taxable income.  The rebate just reduces the cost basis of the home and the agent records the rebate on line 2 of Schedule C (returns/rebates).  So no, giving the rebate benefits the buyer (not taxable) and the agent (not taxable either).  Home builders no longer allow agents to rebate their clients any part of the broker co-op through escrow.

If I do the rebate through escrow on a resale transaction, then yes the lender is notified.  The lender will not allow a rebate higher than the closing costs.  For rebates outside of escrow....well, what happens outside of escrow stays outside of escrow. 

 

[Toesonthanose]

If you are interested in Portola Springs, I specialize in that community and would be happy to answer any of your questions.  You can find more information on Portola Springs at:  www.portolaspringsrealty.com or email me at: info@portolaspringsrealty.com

How is Cariz selling?  I'd like to kindly request that you expedite future phase building to give me the 133 sound barrier that my backyard ambiance requires to be complete.  Thanks in Advance.

Very well!  They will have a new phase release (18 homes) this weekend.  I will let them know.

I was there this past Thursday (3/19) - 17 of 18 sold. One model 1 remaining at 469.9k