You Have Questions? I Have Answers!
I’m available to my clients anytime to answer any questions you may have. Please feel free to call anytime!
WHAT IS A NEW CONSTRUCTION HOMEBUYER REBATE?
A. The internet has simply changed the way people buy homes. As a buyer, you have probably done a ton of research on your own, zoning in on the communities and even the homes you like. So, why hire an agent? Well, even if you are a great negotiator (which many of my clients are), having a realtor who shares the commission with you is a great reason to do so. In addition, it’s always good to have a professional on your team in the event that issues arise with the builder. That’s what I do. I work to negotiate on your behalf, review contracts, run interference if ever there is an issue with the builder and then share a large percentage of my commission with you, the buyer. You’ve done a lot of the work already so I truly feel that my buyers deserve it!
Rebates are legal and allowable in Texas by the Texas Real Estate Commission as well as the Department of Justice – and can be used to cover closing costs, pay for upgrades, lot premiums or even to buy down the price of the home. We can even cut you a check after closing with lender approval which you can use for anything you like!
BELOW IS AN EXCERPT DIRECTLY FROM THE DEPARTMENT OF JUSTICE WEBSITE
Live Link from the DOJ concerning Rebates and how they can be applied
When you meet with the builder you simply need to let them know that you’re working with an agent and give them all of my information which I will provide to you. Once we’ve negotiated your price at that point you should let them know that you’re receiving a 2.5% rebate from your agent. We should start working on applying the rebate to closing costs (the lender will tell us how much can be applied towards closing costs, every loan is different). Whatever amount is left over we can use to buy down the cost of upgrades, appliance packages, lot premiums or even the price of the home. We can even cut you a check for the excess with lender approval. It’s important that we work from the outset, together, to make sure that every penny is applied properly to your purchase. I am happy to assist in these negotiations.
HOW MUCH IS THE REBATE ON NEW CONSTRUCTION HOME PURCHASES?
A. When a new Construction home is sold in Texas, the realtor who represents the buyer typically makes a commission of 3% of the sales price of the home. However, when you work with Texas Homes, I offer you a rebate of 2.5% of the total sale price on new construction homes – through any Texas homebuilder – so basically, I keep only ½% on any new construction home purchase! I credit my buyers the remaining portion of the commission paid by the builder to represent you. The credit can either be applied to the buyer’s closing costs, pre-paids, lot premiums, appliance packages, lowering the price of the home, upgrades, or, with lender approval, I will cut you a check after closing, whichever you prefer. This rebate comes from my commission and does not interfere with any incentives offered by the builder to the buyer. It is simply money that would remain in the builder’s pocket; if you weren’t using a Realtor. It’s a way for you, the buyer, to tap into money you would not otherwise have access to when buying a home. By the way, this rebate is TAX FREE! We will not send you a 1099 for the savings.
HOW MUCH IS THE REBATE ON PRE-OWNED HOMES?
If you are in the market for a pre-owned home, I can still save you thousands of dollars. Obviously, I will need to find the homes for you, take you to see the homes and handle the contract, which is the same full service most Real Estate Agents give you. Although this mean more time invested on my part, I will still share a portion of my commission with you! This is unheard of in the real estate industry. The rebate on pre-owned homes is 1% for homes priced up to $300k and 1.5% for any homes over $300k. No rebates will be offered on homes priced under $100,000.
HOW MUCH CAN I SAVE IF I LIST MY HOME WITH YOU?
Traditional Realtors charge 6% to sell a home. 3% goes to them and 3% goes to the agent who brings the buyer (Typically, that’s how it plays out…seldom does the agent who lists your home also bring the buyer, but it can happen). What I do differently is charge the seller only 1.5% to list any home priced up to $400k (a savings of 1.5% compared to what most agents charge) For homes priced OVER $400k, I will only charge 1% commission to sell your home. That’s a savings of 2% total! If you buy AND sell with me, think of all the money you’ll save. Most of my clients who buy and sell save an average of about $18,000 total by using my rebate program. That’s a NICE savings!
HOW CAN I BE SURE THAT I’LL RECEIVE THE REBATE? IS IT GUARANTEED?
Yes, you can feel comfortable that you will receive the rebate from me. Before you sign a contract with a builder, you and I will enter into a Buyer’s Representation Agreement, which spells out the terms of the rebate. This is a binding contract and holds me responsible to provide you with the rebate, as promised. This is absolutely legal in the State of Texas, and I don’t mess with Texas!
If you are financing your home purchase, your rebate is subject to your lender’s approval. Lenders allow rebates up to the amount of closing costs and/or up to loan program caps. Please speak with your lender regarding the cap for your particular loan. If your lender disallows part of the rebate, then we must get the reduction from the builder which can be credited towards upgrades, lot premiums, appliance packages, or simply reduce the price of the home by the rebate amount. If you wait too long to negotiate this with the builder and or lender, my hands are tied – the rebate must be reduced and the remainder will revert to the Broker. You can avoid any reduction simply by planning ahead. Your lender can tell you more about their rules regarding rebates and I am happy to help you negotiate these items with the builder if needed. Most times we are able to credit the full rebate to the closing costs.
* Any bonuses paid by the builder to the agent are not considered part of the rebate.
WHAT IF MY REBATE EXCEEDS MY CLOSING COSTS?
If you don’t plan ahead, your lender could force you to forfeit part of your rebate, and neither I nor you want that. Your lender can disallow excess credits — the portion of your rebate which exceeds your closing costs. Being aware of the possibility of excess credits will help you take the necessary steps to avoid this outcome. Doing so is your responsibility however, I am happy to assist you with this.
Buyer closing costs are high for typical PITI loans in Texas with property taxes and insurance escrowed. You will need to prepay property taxes and insurance, purchase a mortgagee title policy, pay loan origination fees, etc. Ask your lender for an estimate of your closing costs based on your projected closing date, but be aware exact closing costs will not be known until the title company calculates prorata debits and credits just before closing.
In our experience, buyer closing costs typically run about 2.7-3.1% in Houston, which is more than your 1% Resale Rebate or 2.5% New Home Rebate. However, excess credits can still happen, usually when buyers try to combine seller credits (a common builder incentive) in the same transaction with a buyer’s agent rebate. What to do? Plan ahead and structure the deal from the outset with a lower price or other incentives instead of closing cost credits from the builder (upgrades, lot premium, appliance packages, etc). That way the seller nets the same amount and you get to use your full rebate. Texas Homes is glad to assist in these negotiations, but we can help you only if you are aware of the potential problem and bring it to our attention no later than the time the contract with the builder is negotiated.
If you find yourself near closing and your lender says you can’t use all your credits, there may still be some options to increase your closing costs to your advantage. For example, your lender may suggest applying the excess credit to “points,” buying down a lower interest rate. Another option may be to select a hazard insurance policy with more bells and whistles (and cost) than you really need; then after closing you can remove some of the bells and whistles from your insurance policy (it must still meet your lender’s minimum requirements) and the insurance company will refund the difference in premium. However, you would need to discuss these strategies well before closing, because they would probably require your loan to go back into underwriting, which could delay closing and potentially subject you to penalties for not closing on time.
So in short, from the very beginning we work directly with the lender and the builder and together we figure out how to apply the full rebate either to closing costs via the lender or via the builder in the way of reductions of either upgrades or sale price.
WHAT ABOUT OTHER AGENTS WHO SAY THEY OFFER A 3% REBATE OR EVEN 5%? OR HIGHER?
A. Be careful when dealing with agents that make outrageous claims. 99% of all builders pay the realtor a 3% commission. There may be rare, higher payouts, but the vast majority only pays 3%. Other agents may make the claim that they will pay you up to 3% and some even advertise up to 5%, but they are simply trying to pull you in with this ploy. At the end of the day, they will all try to keep a full 1% and give you back 2%, because the builders are only offering a standard 3% to the agent. With my program, I only keep a half a percent and genuinely give you back 2.5%. This is actually the highest rebate offered in the industry. So, whenever you hear about rebates that are very misleading – you need to ask yourself – do you really want to work with someone who makes it their business practice to deceive people with their advertising? My advice is to be sure to read the fine print and check the credentials and reviews of the agent you’re working with.
DOES THE BUILDER GIVE ME THE SAME PRICE AND INCENTIVES IF I USE A REALTOR THAT THEY WOULD OFFER IF I REPRESENTED MYSELF?
A. Yes, the pricing and incentives are the same whether you use a Realtor or not. This is another misconception people have about rebates. The builder must offer someone with an agent the same price they would offer someone without an agent. Otherwise, it would be discriminatory. They would be setting themselves up for a lawsuit. Also, how many Realtors do you think would refer business to a builder if they found out that their clients were paying higher pricing for doing so? None! Builders allocate 3% to pay a Realtor on every home they build. This comes from their marketing budget. Therefore, if a buyer is not represented by an agent, the extra 3% merely stays in their pocket. Wouldn’t you rather it be given back to you?
WHAT ARE THE STEPS I NEED TO TAKE TO MAKE SURE I RECEIVE THE REBATE?
1. Contact me and let me know which home/builder you’re interested in (I can assist with your search, as well).
2. Enter into a Buyers Rep Agreement with me that spell out the terms of the rebate.
3. Let the builder’s salesperson know that you are working with Brandell at Silberman Realty.
4. Allow me to make contact with the builder, so that I can sign all of the necessary paperwork to represent you.
5. Speak with your lender and find out how much of the rebate can be credited to closing costs on your particular loan.
6. If there is a rebate due to you over and above the amount allowed to be credited towards closing costs, ask your lender if their underwriter will allow your Realtor to credit you the remaining amount on the closing disclosure as a POC item (Paid outside of closing).
7. If the lender will not allow Texas Homes to pay the remaining amount outside of closing speak with the builder and let them know you would like to credit the remaining amount to upgrades, lot premiums or to buy down the price of the home.
8. If you still have funds remaining, ask your lender if you can use the overage towards buying down points.
That’s really all you have to do. I handle the rest! It is very simple and straightforward.
DO I HAVE TO LET THE BUILDER KNOW I’M RECEIVING A REBATE?
If you are financing your purchase, yes, you do. You will want to start working with your lender as well as the builder to make sure that you can receive the full rebate towards closing costs. If this isn’t possible you will want to work with the builder to make sure you are crediting the remaining funds towards upgrades, lot premiums, etc…Texas Homes is happy to assist with this process.
WHY DO I OFFER THIS REBATE?
The Internet has drastically changed the way real estate is bought and sold. Today’s consumers have nearly limitless information at their fingertips and are more educated and informed about their areas of interest, including, schools, communities, builders and even homes of interest. All of the research the buyer does saves the broker time and money, so I pass those savings along to you by sharing my commission. Don’t you think you deserve a part in the commission, since you’ve done so much of the work? Of course! I know how expensive it can be moving into a new home. This is a win-win-win program. My clients benefit from the 2.5% cash back rebate, I benefit from gaining your business and making 1/2% on each transaction, and hopefully, you’ll tell EVERYONE you know about my awesome program! The builder also benefits by selling my clients homes!
When you buy a new construction home through a builder, the builder’s on-site sales team handles the showings and the paperwork. This reduces my time, so I am able to pass that savings on to you! I am here to help you with the details, make sure you are getting a good price, negotiate on your behalf if you want me to, review all of the contracts and make sure that you are well represented and that your best interests are protected.
ARE REBATES LEGAL?
Good Question! YES, rebates are perfectly LEGAL! Lots of people incorrectly assume that there is something illegal about Realtors sharing their commission. No one knows where the rumor started, but rebates are actually 100% legal in Texas. Although this is not the case in all 50 states, Texas does allow it. Read what the Department of Justice has to say about Realtor Rebates. Not only do they ENCOURAGE them, the DOJ is fighting to make them legal in ALL states! If you’re fortunate enough to live in a state that allows rebates, take advantage of it! You would be remiss if you didn’t…
Texas Law says rebates are legal however, we are bound by federal laws that stipulate that the rebate MUST be disclosed on the closing disclosure (formerly known as the HUD-1). Failure to list the cash rebate portion of the rebate on the closing disclosure is in violation of federal RESPA mortgage banking laws.
WHY USE TEXAS HOMES? THERE ARE OTHER REBATE COMPANIES OUT THERE, RIGHT?
Yes, there are other companies out there, for sure. The majority of them offer a considerably smaller rebate than I do. My rebate is the best in the industry and I have been in business since 1997, offering rebates before anyone else. You could say that I have “pioneered the rebates” and have hundreds of satisfied buyers and sellers whom have bought and sold multiple homes with me through the years. They have saved thousands and thousands of dollars and referred friends, family members and co-workers time and time again. I’m a real person, not some big conglomerate. I answer my phone all the time and am always available to my clients when they call. I believe in the personal touch. As a consumer, I appreciate good customer service and I think my clients do, too.
CALL OR EMAIL ME TODAY – I’LL BE HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE!
“We have worked with several Realtors and had not found one that I would recommend until I worked with Brandell. Brandell clearly has a lot of experience working in a competitive real estate market. Brandell was very professional and provided guidance as we encountered various scenarios, and went to great lengths to ensure that the process between our offers acceptance and closing all went smoothly…Brandell took the time to really get to know what we were looking for…We have referred Brandell to family members who have also used her.”
Vance and Margo W – Houston, Tx.
“I don’t think that I’ll ever use another realtor other than Brandell again! Brandell is the most responsive and professional, real estate agent that you will meet – period. From the point that you start looking at properties until the last signature at closing, Brandell makes the whole process run smoothly. Plus, she refunds a portion of her commission to the buyer. The service that Brandell offers, combined with her fee structure, is really a huge and pleasant shift in the real estate industry. I just purchased a home, and am already looking forward to my next purchase using Brandell in a few years. Thanks Brandell!”
Jeff and Gloria M. Houston, TX
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