Rebate on New home purchases - Discuss

eyephone said:
best_potsticker_in_town said:
eyephone said:
best_potsticker_in_town said:
I have my real estate license, mainly for my own purposes (buy/sell for me or close family). I save some $$$ and I don't have to argue with agents about the rules.

This year, I've heard some 2 very close, out of area, friends a flavor of: "my agent ignores me, is not responsive, laughs me off when I ask for a rebate. I do all the work, send the listings I want to see, and most are open houses."

I feel bad for these friends so I offer to help. I tell them if you see a place you want to write an offer on to let me know. I rebate them a large part of my commission because they do most of the work. They love this model and it's very obvious that I make their best interest top priority. I've also honestly said, "I can't make it to [city] anytime soon, it's best if you use a different agent for a showing" and they're bummed.

It's crazy to hear so many people treated subpar by their agents.
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So do you offer a max rebate?  :D ;D ;)
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You better believe it. MAX!
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Do you give a 1099 after you give the rebate?
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No way, it's against my religion.  ;) Plus, my deals are primarily with family or close friends and its just not right to 1099 them.
 
Wish I had taken the time to read this thread sooner! Feeling like I did not do my due diligence and research enough even though I've been reading TI more consistently :( Anyway, I have an agent that I brought to every first visit to the sales office, but I just did not know that some agents offer some of the rebate back. We did a lot of our first visits back in Feb this year and although I was looking at resales and new builds, I am pretty sure that I will purchase a new build soon (California Pacific). Currently on a priority list and just waiting for the next phase release. My agent never mentioned offering some of their rebate back and I had no idea this was a thing. Not sure if it is too late for me to even bring this up to our agent? I would appreciate any thoughts or feedback! What would you recommend I say or do in this situation? I like my agent and they have been helpful throughout my whole home search process, but I can't help but feel I'm missing out on this rebate thing!
 
Ask him.
There are a lot of realtors on TI that give a lot back, and not 1099 either.
 
IntheVine said:
Wish I had taken the time to read this thread sooner! Feeling like I did not do my due diligence and research enough even though I've been reading TI more consistently :( Anyway, I have an agent that I brought to every first visit to the sales office, but I just did not know that some agents offer some of the rebate back. We did a lot of our first visits back in Feb this year and although I was looking at resales and new builds, I am pretty sure that I will purchase a new build soon (California Pacific). Currently on a priority list and just waiting for the next phase release. My agent never mentioned offering some of their rebate back and I had no idea this was a thing. Not sure if it is too late for me to even bring this up to our agent? I would appreciate any thoughts or feedback! What would you recommend I say or do in this situation? I like my agent and they have been helpful throughout my whole home search process, but I can't help but feel I'm missing out on this rebate thing!
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1. Did you sign an exclusive agreement with your agent? (That you will only use him to buy a house. I don't recommend this.)
2. Bring up the rebate topic with your agent.
3. If he doesn't want to play "ball" then you might have to part ways.
4. You possibly might want to say this. I like you a lot, BUT since you didn't provide me with a rebate your _____. (Fill in the blank)  :D
 
Yeah just ask. My guess is your agent will agree to a rebate, but the exact amount (and 1099) will likely be the topic of discussion.

I don't have an IP registration form in front of me, but I believe the form states that there's an expiration. I think it's something like...if buyer doesn't enter into contract within 60 days of registration no commission will be paid unless buyer is re-registered.
 
eyephone said:
1. Did you sign an exclusive agreement with your agent? (That you will only use him to buy a house. I don't recommend this.)
2. Bring up the rebate topic with your agent.
3. If he doesn't what to play "ball" then you might have to part ways.
4. You possibly might want to say this. I like you a lot, BUT since you didn't provide me with a rebate your _____. (Fill in the blank)  :D
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Thanks eyephone. To answer your question, no I did not sign an exclusive agreement. So, I guess the good news is I have some leverage :)  I will bring the rebate topic up to him.

Also, thanks potstickers. We are well beyond the 60 days since we signed in, we are actually at 90+ days now. Is there anything we have to do specifically to "re-register" or is it just filling out one of those sheets at the sales office again?
 
Best is to call the sales office and ask...they may not enforce the expiration. Or, the act of joining the priority list voids the expiration clause. If you want to switch agents, I think they may require your previous agent sign a letter saying they are no longer your agent.
 
Now that I am thinking about what to say to my agent when I bring up the rebate topic to him...any advice on valid points or arguments I can bring up to him besides other agents usually do it? haha...i hope he won't be resistant to the idea, but you never know...
 
Your agent works for you, not the other way around.

It's a heavy referral business, as in you may have current and future referrals, that should perk up your agent's ears.  But first, take care of the rebate...
 
From a time commitment perspective, it's a lot less work. Once a buyer enters into a contract with the builder, the sales office handles pretty much everything. As opposed to a re-sale, where there are inspections, appraisals, contingency removals, etc.
 
USC, you need to do a better job of advertising your services to all new development buyers so people just use you and get their rebate without a hassle. Maybe get one of those spinning sign guys at the corner of each new development doing some acrobatics with your company sign.
 
Just to be fair to your agent, keep in mind all the time he has spent with you.  Typically, a new construction transaction will mean a lot less time for the buyer agent.  However, if you are the type of person that wants to look at 20+ properties (with him by your side) and have him register you at 10+ sites and pick his brain on every last detail, I would not expect too high of a rebate.
 
rickr said:
USC, you need to do a better job of advertising your services to all new development buyers so people just use you and get their rebate without a hassle. Maybe get one of those spinning sign guys at the corner of each new development doing some acrobatics with your company sign.
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Too funny, but don't think that I haven't thought of that.  haha

InTheVine, the saying of "you don't get what you don't ask for applies" so don't be scared in asking for a rebate.  Yes, there will be many agents that'll throw the "I'm a full service agent and I don't give rebates" but it never hurts to ask.  If your agent says NO then you can decide if you want to part ways.  Remember, a smart agent looks at things from a big picture perspective in terms of future repeat and referral business instead of how much they'll make on one transaction....I know I do.  I live by the "give up a little now to get more later" motto.  Good luck and keep us posted.
 
woodburyowner said:
Just to be fair to your agent, keep in mind all the time he has spent with you.  Typically, a new construction transaction will mean a lot less time for the buyer agent.  However, if you are the type of person that wants to look at 20+ properties (with him by your side) and have him register you at 10+ sites and pick his brain on every last detail, I would not expect too high of a rebate.
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This is true, if you the agent has shown you 20+ resale homes and you've visited a dozen new home sales offices it probably wouldn't be reasonable to expect a big rebate.  Also keep in mind that many agents work for a broker that takes a split of the commission which can be as high as 20-25% and that makes it difficult for the agent to give any kind of decent rebate. 
 
thanks again everyone! keep you posted on the outcome. And yea, I totally understand and will keep in mind how much time my agent has spent and his broker's cut. Overall, we only looked at only 1 resale together and probably like 8 new sales offices.
 
IntheVine said:
thanks again everyone! keep you posted on the outcome. And yea, I totally understand and will keep in mind how much time my agent has spent and his broker's cut. Overall, we only looked at only 1 resale together and probably like 8 new sales offices.
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Also, make sure your not 1099. (it's like getting bit by a snake. Here's your rebate, but at the end of the year surprise here is a 1099 for the money you got.)
 
Can anyone send me a link or something I can send to my CPA regarding this? He believes the only way is 1099. Also had a friend go through something with IRS saying it has to be 1099 as well.
 
Go back a few pages in this thread and USC posts some content that justifies it. There are also some valid counter arguments too in terms of RESPA.
 
jmoney74 said:
Can anyone send me a link or something I can send to my CPA regarding this? He believes the only way is 1099. Also had a friend go through something with IRS saying it has to be 1099 as well.
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Besides the IRS ruling with Redfin, you just need to step back for a second and apply some common sense when it comes to the "earned income" definition.  The IRS defines it as earnings from you working for someone or some company who pays you providing goods and/or a services OR earnings from you owning and running a business or farm (investments, rentals, etc would fall into this group).  Where has the buyer done work for the agent to constitute earned income?  Obviously it's the other way around.  So the rebate is a reduction of the cost basis in the home (the same way it would be if the agent provided the rebate as a credit towards closing costs in escrow).  So I'd also for any agent or CPA to explain to me why a rebate done through escrow is treated a reduction of cost basis but a rebate outside of escrow should be treated as earned income?  See how that makes zero sense.  Just like you have uneducated and/or lazy agents, there are also CPAs that are no better. 
 
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