Frequently Asked Questions
We pay commission rebates at closing as a credit to the buyer at closing, offsetting closing costs, discount points, prepaid taxes and insurance, HOA fees, lender fees, etc. that you would otherwise have to pay. A credit at closing is as good as cash going into your account because it directly reduces the amount of cash you have to transfer out of your account for closing.
As per TRID/RESPA regulations, rebates are not paid outside closing. As summarized on the Texas Real Estate Commission website: “All rebates should be reflected in the closing disclosure form and any cash rebate to a buyer should be made with the consent of the buyer’s lender. A license holder may not pay a rebate outside of the transaction.”
Rebate Texas does NOT issue 1099s to clients!
We cannot give tax advice, since we are not accountants, but our understanding is that realtor rebates at closing should be treated as an adjustment in the buyer’s cost basis (just like seller contributions at closing). Basis becomes relevant for possible capital gains taxation in the year the property is sold; however, under current tax law, up to 500k in capital gains on a primary residence are untaxed (MFJ, 250k for single).
Most clients are wasteful of real estate professionals’ time and resources and the real estate industry is similarly wasteful of clients’ resources. Most realtors have to charge their serious clients much more than necessary to make up for all the fruitless efforts they expend on not-so-serious, high-maintenance people they have to deal with. They also must subsidize an inefficient business model with big offices, broker overrides, team leaders, billboards, etc.
REBATE TEXAS and our clients partner together to eliminate the waste – and to share the rewards!
We eliminate waste from our side (by running a lean operation with minimal overhead) and our buyer clients eliminate waste from their side (by doing their own market research and by being low-maintenance clients).
Only well-prepared, low-maintenance, and conscientious buyers qualify for our program – clients who earn their rebate. We believe smart, serious home buyers deserve a smart, serious broker (and vice versa).
Rebates must be applied at closing and appear on the closing statement. If buyer is using a mortgage, Rebates must be allowed by buyer’s lender. The 2% and 2.5% rebates assume a 3% commission is offered. On purchases below 300k, a minimum broker commission applies: 3000 for resale and 1500 for new construction. The 2.5% new home rebate is for homes sold through salespeople in model homes representing builders that use their own contracts, where broker assistance required is minimal. Boutique builders that use third-party listing agents are handled as resales. Rebates may be reduced for distressed properties, corporate listings, and when clients require multiple showings and/or offers. New home rebates are subject to builder approval. Please contact us for a complete list of terms and conditions.
No! Only smart, conscientious, decisive, well-prepared home buyers – who respect our time and their own – qualify for the rebate program. Indecisive, unprepared, unfocused home shoppers do not.
We’re not the best for everybody – but for smart, well-prepared buyers, 3 main things set REBATE TEXAS way ahead of the competition:
1) Proven Results,
2) Higher Client Satisfaction, and
3) Bigger Rebates!
Yes and no. We’re like the economy airline that provides the essential services at a great price by not building into the price many extra non-essentials. Foe resale buyers, we provide a limited number of serious showings, contracts and amendments, negotiations, final walkthroughs, and guidance from start to finish. For new construction, the builder does the showings and contracts, which is why the rebate is larger for new construction homes. We won’t shuttle your checks to the title company and we won’t sit next to you at closing, but we’ll verify your closing statement ahead of time and keep you on-track throughout the process. Our clients are willing to forgo hand-holding and get thousands of dollars back at closing instead!
Yes! You can confirm it here right on the Texas Real Estate Commission’s website. Rebates are helping introduce competition in an industry where true price competition is rare, despite the paradigm shift that has occurred in technology. In 2005 the US Department of Justice successfully sued the Kentucky Real Estate Commission to allow rebates in Kentucky. In 2007, the Federal Trade Commission (FTC) and DOJ issued a joint report “Competition in the Real Estate Brokerage Industry,” praising new business models like ours that are finally starting to make the real estate industry more competitive!
In our experience, buyer closing costs for PITI mortgages on home purchases in the 300k-700k range in Texas typically run about 2.7-3.1%, which is more than the 2% Resale Rebate and the 2.5% New Home Rebate, so this isn’t usually a problem. This can be as issue if a new construction builder is offering a closing costs incentive in addition to our realtor rebate. Ask your lender for a worksheet of your estimated cash cash to close, inclusive of the expected rebate. If the expected rebate exceeds your closing costs, let us know the approximate excess amount as soon as possible, so we can help strategize solutions. We have provided multiple rebates in excess of $25,000, so we can usually figure a way for you to utilize the entire expected rebate.