How RebateReps is positioned in the "rebate real estate" marketplace:
There are several new real estate companies on the scene that offer to rebate up to 75% of the buyer's commission.
I'd like to delve a bit into how RebateReps.com (which offers a 33% rebate) compares to BuySide (offering a 75% rebate) and Redfin (offering a 75% rebate).
I would group BuySide and RedFin into the same category: They have "virtual" agents who work out of a call center and never physically interact with their clients.
On the other end of the spectrum are traditional agents who offer full service & high touch, but do not provide rebates (and in fact campaign vehemently against them, seeing rebates as an erosion of their business model.)
RebateReps sits in the middle. RebateReps is more of a "buyer's club" than an actual real estate firm (although it's run by a real estate company based in Virginia). You can almost think of it as an association or a "union" that regular, non rebate agents can belong to.
By participating in RebateReps, agents are making a certain commitment to us, and to the clients we refer to them, as follows:
1. The agent will give the buyer web-based tools to start their home search online (these tools will vary based on what the agent has available in their service area, but generally include MLS search tools and listing alert emails at a minimum) 2. The agent will be available via phone & email to answer buyer's questions as they start their search 3. Once the buyer has done the preliminary research involved in finding a home, the agent will step in to help 4. Once the agent steps in to help, they will provide a "full service" experience like any other agent would, including the negotiation of contracts, satisfying contingencies, arranging inspections, and generally shepherding the contract successfully through to closing. 5. In return for the buyer having done the initial part of the legwork and saving the agent time in the beginning of the process, the agent shares his commission with him. The exact amount of the rebate depends on the amount of the commission being paid, but is generally 1% of the sales price (equivalent to 1/3, or 33% of the agent's commission).
Here's why we think this is the best model for buyers seeking out rebates:
1. Rebates Require A Tradeoff: No matter which agent a client speaks to, rebates always require a trade-off. It's simple economics. Realtors have two things to offer their clients: Time, and expertise. Anytime a firm offers a rebate, they either: * A) Won't be able to spend as much time with the buyer on the transaction, or * B) Won't have the expertise & knowledge to guide the buyer through the transaction and avoid pitfalls. When a buyer focuses on getting a rebate, they will always be giving one of those two things up (and sometimes the buyer gives up both if the firm isn't very good).
2. Rebates Require More Work On The Client's Part: If a buyer comes to a RebateReps requesting a rebate, our RebateReps agents will happily give it, but in return, they'll ask the buyer to do the initial home searching on their own. Many RebateReps agents will even loan out a free GPS machine so buyers don't get lost. The way RebateReps agents afford to give buyers a rebate is by having the buyer do the time-consuming home search process on their own time, using the agent's tools. Then, the agent steps in when the buyer is ready to have them negotiate on a specific home. From that point on, the RebateReps agent serves as a "full service" agent to ensure the home closes successfully. With RebateReps, the buyer gives up some of the "time" but not any of the "expertise".
3. Rebates Can Be "Penny Wise & Pound Foolish": The really dangerous thing about real estate is that one single mistake can cost a buyer many thousands of dollars. If a buyer misses one item in an inspection, say a roof problem, it can cost the buyer $5,000+ to fix. Or putting a contract together the wrong way could cost the buyer $20,000 (and possibly much more). Not negotiating the best deal could also cost the buyer much more than they'll save by getting a rebate. Having a problem with a seller and getting into litigation can prove tremendously expensive. Therefore, rebates are tricky. They're not for everybody. This is the major issue we have with BuySide and Redfin. Since they can't have local, expert agents interacting with buyers in person, the potential for an oversight, mistake or problem is much higher, which can easily cost the buyer much more than the benefit of a rebate. Redfin might be able to get away with saying that Realtors generally work very inefficiently (and rightly so), but it would be very erroneous to imply that there is not a tremendous amount of value in having a local, expert agent handling the transaction in peson once the initial searching has been done and it's time to negotiate terms, write a contract, and ensure it closes successfully. This is the value that RebateReps provides.
Our approach enables buyers to perform the "self service" piece in the initial home searching, which is the part most buyers want to do by themselves anyway. This approach allows RebateReps agents to spend time with buyers once they're ready to put a contract in, which is where the really expensive pitfalls can be.
An additional benefit of our approach is that it gives regular, non-rebate Realtors a way to compete in the rebate field without having to advertise rebates to their local market, meaning they get the best of both worlds: They can be "full service" non rebate agents around town, and then when a RebateReps lead comes to them from us, they can offer that buyer a rebate because the buyer understands they'll have to do most of the initial legwork.
The short answer is you may have just made a $10,000 mistake. Then again, you may still be able to get the rebate. Here's why:
A builder allows you to have an agent when you show up on your first visit. If you've already visited the builder, they are not legally bound to compensate a real state agent, since you're already a potential client. However, sometimes a builder will allow you to hire an agent after the fact. Your first step should be to call the builder ASAP and ask them if you can have a real estate agent represent you. If the builder says yes, we will assign a local RebateReps agent to you. Cross your fingers, because if the builder doesn't allow you to hire an agent, then you have to either a) buy that home without the rebate (ouch!) or b) pick another builder.
How can RebateReps agents afford to give rebates?
We have founded our entire firm on the concept of rebates. Out network of agents utilize Internet technology to streamline their costs and to be more efficient. (For example, this FAQ you're reading now means we don't have to answer the same questions over and over on the phone!). RebateReps agents are willing to earn less money on every transaction because they know that you probably already have an idea of the property or area in which you want to buy, so the agent doesn't have to be a "taxi driver" and drive you all around town. Since you're saving the agent time, they can afford to share their commission with you. RebateReps agents also know that satisfied customers lead to a greater number of clients. When they give you a rebate, they are basically giving you back part of their commission... a commission which the SELLER pays a real estate agent. A buyer never pays a commission, so the rebate isn't costing you anything. You pay the same price for a house whether you have a real estate agent or not. So why not get a few thousand dollars back when you buy your next home?
Why don't all realtors offer rebates?
Most real estate agents can't afford to give rebates, for a number of reasons. Usually the real estate agent has to give up to half of his or her commission to the head office. Instead of paying you a rebate, they are paying the office to keep the lights on. Lastly, very few realtors are using technology effectively (like RebateReps agents do!) and are not able service clients while reducing costs.
The agents in our network are all top-tier, accomplished real estate agents with one thing in common: They are all ready to help you find your next home. And to get you as a client, they're willing to share their commission with you!
You pay the same price when you buy a house with or without a real estate agent. Why not have a RebateReps.com real estate agent represent your interests and give you a cash rebate at closing?
Submit an inquiry at right to have us connect you to a local RebateReps agent.
This seems too good to be true. What's going on here?
For Buyers: The math is simple - most real estate agents keep all of the commission the seller pays them, but RebateReps agents don't. Instead, RebateReps agents give a cash rebate back to you. When the seller (or builder) pays a commission, the RebateReps agents in our network are simply giving some of their commission back to you. There is never any charge to you as the buyer. For Sellers: RebateReps agents offer a discounted listing fee (i.e., RebateReps agents charge less than most other Real estate agents do)
We like to say that we "remove the taxi driver" from the home buying process. Here's how:
A traditional real estate agent might spend several months driving you around every weekend to look at new homes. That takes a lot of time, which is why the agent has to make a large commission on each transaction (which, by the way, the seller pays). But we figure that you'd prefer to start your home search on the Internet instead, right?
So, imagine if your real estate agent could leave the taxi driving up to you and just focus on negotiating you a great deal on your home. That's how RebateReps works. And to thank you for not having to be a taxi driver, the real estate agent shares his commission with you!
A local, top-notch agent will help you identify areas & homes you might like, and give you the resources to narrow your search down on your own. Once you're ready to get serious about buying a home, the RebateReps agent will provide you with a full service experience, but since he doesn't have to be a taxi driver, he can afford to share his commission with you! Sounds like a great deal, right? It is! We both win - the agent can focus on what he does best, negotiating a great deal for you and guiding you through the escrow & closing process, and you get the freedom to start your home search on your own terms & timeframe. Why didn't anyone think of this sooner?! (Actually we have an answer for that too - it wasn't possible before the Internet!)
When buying a resale home, the seller's agent is known as the "listing agent". The listing agent charges the seller a fixed fee, (often 6% - so we'll use 6% as an example here). The seller pays this 6% fee whether or not you, the buyer, have an agent representing you. This means that when you do NOT have an agent, the listing agent keeps the entire 6% commission. The seller has no motivation to offer you a better price if you buy his house without a real estate agent, because he has to pay the same 6% commission to his listing agent either way! RebateReps lets you take advantage of this "loophole". When you use a RebateReps agent to represent you, the RebateReps agent gets paid part of the listing agent's commission, and then rebates part of it to you!
When buying a new construction home, the builder sets the price. If you buy a new construction home and have a RebateReps agent present, the builder must pay your agent a commission - even though you pay the same price for the home! The law stipulates that a builder can only pay a commission to a licensed real estate agent. Without an agent present, you pay the same price as you would have if you had arrived with a RebateReps agent. However, without an agent, you forfeit your opportunity to get a rebate.
Our secret strategy that other real estate agents don't want you to know. Here's how our program works (and how we can afford to do it!).
Most real estate agents will keep the entire commission the seller pays them. But RebateReps agents share their commission with you with the "two zeros" program. Just take the last two zeros off the price of the house, and that's your rebate!
For example:
If you buy a $238,000 home, you get $2,380 as a rebate
If you buy a $527,473 home, you get $5,274.73 as a rebate
If you buy a $2,319,264 home, you get $23,192.64 as a rebate
The rebate is paid to you at closing, meaning you bring less of your own money to the closing table. In fact, some buyers even walk away with a check at closing because their rebate was so large (and greater than their closing costs). Imagine buying a house and receiving a check at closing!
For example, if you buy a $525,000 home, you'll get a $5,250 rebate. If you have $10,000 in closing costs, instead of having to bring $10,000 to closing, you only bring $4,750 (which is $10,000 - $5,250). But if you only had $3,000 in closing costs, and you were getting a $5,250 rebate, you would actually get a check for $2,250 at closing!
There is never any charge nor any fees to you, the buyer. It is the seller (or builder) paying the real estate agent's commission, part of which is credited back to you at closing.
I like to say that we "remove the taxi driver" from the home buying process. Here's why:
A traditional real estate agent might spend several months driving you around every weekend to look at new homes. That takes a lot of time, which is why the agent has to make a large commission on each transaction (which, by the way, the seller pays). But we figure that you'd prefer to start your home search on the Internet instead, right?
So, imagine if your real estate agent could leave the taxi driving up to you and just focus on negotiating you a great deal on your home. That's how RebateReps works. And to thank you for not having to be a taxi driver, the real estate agent shares his commission with you!
A local, top-notch agent will help you identify areas & homes you might like, and give you the resources to narrow your search down on your own. Once you're ready to get serious about buying a home, the RebateReps agent will provide you with a full service experience, but since he doesn't have to be a taxi driver, he can afford to share his commission with you! Sounds like a great deal, right? It is! We both win - the agent can focus on what he does best, negotiating a great deal for you and guiding you through the escrow & closing process, and you get the freedom to start your home search on your own terms & timeframe. Why didn't anyone think of this sooner?! (Actually we have an answer for that too - it wasn't possible before the Internet!)
"Real Estate Options: A group of real estate agents want you to hit the internet, to find your next home. They'll even give you cash back for using their service. For more information www.rebatereps.com" - Fox Channel 13 Evening News - June 2006 Click To See Video
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
We like to say that we "remove the taxi driver" from the home buying process. Here's how:
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