FREQUENTLY ASKED QUESTIONS
What is a real estate commission rebate?
Real estate brokers are paid a sales commission based on the purchase price of the home. The commission is usually based on a percentage – for example, a buyer’s broker receives 3% of the purchase price as a commission…..on a $100,000 home, the buyer’s broker would receive $3,000.00 for helping the buyer purchase the home.
A “rebate” occurs when a buyer’s broker shares a portion of his/her commission with the buyer. The rebate is paid to the buyer upon the successful completion of the purchase process which is known as “close of escrow.”
TAP Realty rebates 50% of the commission to AZ home buyers on all homes purchased through us – new homes, resale homes (aka pre-existing homes), foreclosures and short sales.
How do real estate brokers get paid?
Resale homes – including foreclosures and short sales.
The home seller always pays the sales commission. If the seller agrees to pay a 6% commission, the broker who lists the home (listing broker) typically shares the total commission 50/50 with the broker who represents the buyer (buyer’s broker). The listing broker receives a 3% commission and the buyer’s broker receives a 3% commission. Commission amounts are based on the sales price of the home.
New Homes – offered by home builders.
Home builders employ sales agents to represent them. The builder pays these agents a salary and/or a commission. Builders also offer a commission (usually 3%) to brokers who represent buyers.
It’s been estimated that 70% of all new home buyers are represented by a buyer’s broker. So home builders have a “one-price” policy. Buyers pay the same price for a new home whether they are represented by their own broker or decide to deal directly with the builder’s agent. If a buyer deals direct, the builder pockets an extra 3% profit because the buyer did not have representation. The commission amount to buyer-brokers is paid on the base purchase price of the home excluding options, upgrades and builder incentives.
How much do real estate brokers earn?
Commission amounts can vary depending on the type of home – whether the home is a new home, resale, foreclosure, or short sale. The amounts paid to buyer-brokers can range between 2% and 3.5% but occasionally bonuses are offered. Be sure to ask your broker what the commission amounts are on each home. Your broker should readily be willing to discuss this with you, and provide proof.
How does a commission rebate benefit the buyer?
Rebate brokers agree to share their sales commission with the buyer. TAP Realty offers a 50% rebate which currently is the most generous advertised rebate in Arizona. If we receive a 3% commission, 1.5% is paid to the buyer at closing. Example – on a $200,000 home purchase, the buyer will receive a $3,000.00 rebate.
Can I spend the rebate anyway I choose?
Yes. You can spend the cash rebate anyway you want, although most buyers who are financing their home use the rebate toward the lender and title company closing costs. Other buyers use the rebate for home improvements, landscaping, furniture, or even a vacation.
Do I have to use a certain lender to receive a rebate?
No, we are completely separate from lenders. You are encouraged to shop around for a lender who offers the most competitive pricing and select one you’re most comfortable with. New home builders do offer incentives for you to use their affiliated lenders – those incentives are very attractive and hard to pass up.
Is there any incentive for me to deal directly with the listing broker on a resale home or the builder’s representative on a new home?
Absolutely not! The listing broker on a resale home will pocket the entire commission for himself, and you will not have a broker representing your interests exclusively. If you deal directly with the new home builder’s agent, the home builder retains the 3% commission they would’ve paid the buyer’s broker. You are literally throwing money away if you don’t use a rebate broker to purchase your next home. You will pay the exact same price whether or not you use a rebate broker.
Are all rebate brokers the same?
No! Some rebate brokers require you sign an exclusive buyer’s broker agreement with them. Others limit the rebate based on a minimum purchase price. Yet others reduce the amount of your rebate if you look at more than 4-5 homes with the broker. Rebate amounts also vary between real estate companies…..some offer only 20% to 33%.
Champion Realty has none of these requirements, limitations or conditions…..no gimmicks, no catches! If you buy any home through us, we guarantee to share 50% of the sales commission with you.
Is your rebate guaranteed in writing?
Yes! Upon request, we’ll provide a signed guarantee certificate to you.
Are commission rebates legal in AZ?
Rebates are legal in Arizona and 39 other states. They are approved by the United States Department of Justice and the Arizona Department of Real Estate.
Do you provide full-service to home buyers?
Yes we do. The only thing we don’t do is put you in our car and drive you around showing you listings we selected. With today’s technology, 90% of home buyers prefer to locate homes of interest themselves by accessing the REALTOR® Multiple Listing Service. Buyers are able to drive neighborhoods and view homes in the privacy of their own vehicle before engaging the services of a broker.
Once you find a home you’d like to view from the interior, contact us for an appointment. That’s where our full-service representation kicks in……we prepare the purchase contract, negotiate the best deal possible for you, and supervise the rest of the purchasing process toward a successful closing.