FL MORTGAGE BROKER: SELLER CONCESSIONS vs. REALTOR REBATE

Account Closed · 2018-04-22T05:40:17-07:00

If you're one of the vast majority of Investors who's been "Asleep at the Wheel" and are discovering the massive Equity Savings available to consumers thru REALTOR REBATES, which the U.S. Dept. Of Justice has been trying to educate consumers about for many years, this is information you need to know. US Dept. of Justice on Realtor Rebates https://www.justice.gov/atr/rebates-make-buying-home-less-expensive https://www.justice.gov/atr/competition-and-real-estate-state-31 FREC (Florida Real Estate Commission) Rule 61J2-10.028 paragraph (2)The sharing of brokerage compensation by a licensee with a party to the real estate transaction (i.e. the buyer or seller) with full disclosure to all interested parties is not considered a violation.Facts: Seller Concessions to pay for Buyer's closing costs and prepaids are NOT the same as REALTOR REBATE. With seller concessions, the Buyer is actually paying more for the property to get the seller to pay closing costs and pre-paids.Realtor Rebate on the other hand, allows the Buyer to get best deal on the property AND have their closing costs and pre-paid costs paid for them.Comments welcomed, just please keep them non-confrontational, relevant to the Topic and focused on...helping BP Investors have & keep BiggerPockets!

Indre White

Real Estate Agent · Miami, FL · Member since 2016 · 26 posts · 10 votes

8y

As a realtor, I do not agree with this being best option. Realtors are only getting 2.5%-3% commission on a deal( and if it is discounted deal, makes even less $), which goes to broker, then broker keeps anywhere from 10-40% of that commission. Afterwords, you need to pay taxes and left with barely anything. Of course, this could add to sellers profits if the realtor gets to offer rebate. But again, sellers are not obligated to use realtors if they want all profits for themselves. I always offer some incentives to my buyer clients (like paying closing attorney fee from my commission) based on their financial need, but losing half of commissions just because seller wants more cash on the deal does not seem fair, especially to realtor who does take the job seriously, spends hours on research, driving around clients for few months till they decide, marketing and advertising costs, phone calls, negotiations, and more...

0 Reply

Account Closed

OP

Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes

8y

@Indre White,

I'm sure you are a good Miami Realtor, who works hard and cares about your clients.

But the facts are, that 3% Points in real estate commission, most especially on property over 300k has gotten out of hand and smart consumers are finding alternatives.

These are estimated Rebates offered to consumers in South FL as well as all over Florida through Full Service Buyer's Realtors

300k x 3% = $9,000 / Rebate To Buyer $5,000

400k x 3% = $12,000 / Rebate To Buyer $8,000

500k x 3% = $15,000 / Rebate To Buyer $11,000

600k x 3% = $18,000 / Rebate To Buyer $12,000

700k x 3% = $21,000 / Rebate To Buyer $16,000

800k x 3% = $24,000 / Rebate To Buyer $19,000

900k x 3% = $27,000 / Rebate To Buyer $21,000

1mil x 3% = $30,000 / Rebate To Buyer $23,000

2mil x 3% = $60,000 / Rebate To Buyer $50,000

Etc.

What seems to be a common theme with realtors who don't offer Buyer Rebates is that consumers should feel obligated to use them regardless, without expecting them rebate, because of their internal costs and/or the commission split they're under with their Real Estate Brokerage.

As a Florida Mortgage Broker, like most, for years we've suffered under relentless efforts by realtors who have coerced and steered our Pre-Approved borrowers to their "preferred" lenders.

Realtors will do this at the drop of a dime, with absolutely ZERO consideration of months of prior time & effort we may have invested in our borrowers...and feel good about it too!

Check out Keller Williams' dear leader's attitude towards the Mortgage Industry

Well, all that bad behavior without any way for the Mortgage Industry to retaliate has come to an end and stops now with the above "Equalizer"

0 Reply

Raymond J. RodriguesBusiness Member

Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes

8y

@Account Closed would since you are a broker and not a direct lender L.O that is only making 1.75bps. Why won’t you offer some of your commission instead of trying to have other people make sacrifices while you end up making none?

[email protected]619-456-8311

Helm Mortgage Corp.5126 Reviews

Website View Page

2 Reply

Lynn McGeein

Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes

8y

I typically don't charge 3% for my side as I also feel it's too much money, especially on higher-priced homes, but I believe rebates are not a good idea at all. 3% per side seemed more reasonable when house prices averaged $100,000 or so, but now that they're closer to $300,000, I think it's wrecking the market asking sellers to pay 6% to sell a house, 3% for closing costs, etc. And all those expensive ads where the Broker states they pay thousands for marketing your home never actually mention actual listings, just the Broker's name, so sellers aren't paying 6% to market their home -- they're paying 6% to advertise the Broker. The buyers I work with understand that they can make a stronger offer using my services because they can offer less or ask for closing costs in part because I'm reducing my side of the commission in the offer. Most sellers appreciate the effort of me reducing their expensive costs, and I believe it reflects well on the whole transaction as people are more amenable to compromise when they feel they are being treated fairly. Real estate brokerages should eventually consolidate to be a more professional, service-oriented system, not commission and sales based, that would save most sellers thousands and improve the overall strength of the market by not making sellers have to pay 9% or more of their home's value just to sell, not to mention the transfer taxes, etc.

0 Reply

Account Closed

OP

Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes

8y

@Raymond J. Rodrigues, can you say...DODD FRANK ACT?

We Mortgage Brokers suffered the most from the Post Dodd Frank Act and the Witch for a Scape Goat that fell on the Mortgage Industry over the past decade which already cut our compensation WAY back! But what reduction in Realtor Points were inflicted on the industry behind the melt down? Zero!

The Federal Laws made the process to obtain a mortgage and actually close on the loan in America drastically harder, while searching for and finding real estate has gotten Drastically easier and is very simple...Offer and acceptance, then hand off the lender.

Per Federal Law forced set compensation agreements with lenders that can only be changed Quarterly, so generally its a no go.

But that is not the point, the point here is the Massive Tax Free Equity Savings that are available to BP Investors.

0 Reply

FL MORTGAGE BROKER: SELLER CONCESSIONS vs. REALTOR REBATE

FL MORTGAGE BROKER: SELLER CONCESSIONS vs. REALTOR REBATE

Most Popular Reply

5 Replies