Seizing Gains From The Real Estate Cash Rebate System


Real estate is a highly competitive field where agents and brokers vie for customers. This is because they work on commission only. The real estate cash rebate program was designed originally to give agents and brokers an edge in a difficult market, but this is changing today. Consumers need to find a way to save money when buying a home and agents and brokers need customers.

Although some states still participate in this program, governmental agencies in many states are doing away with this program. They have various reasons which revolve around that fact that it would generate unfair competition between brokers and that those with the means could offer more than “the little guy.” However, for those who can find cash rebate and incentive programs, it is a great way to buy a home and still walk away with a little cash in your pocket that can be used toward the cost of moving or other needs.

In addition to cash refunds, often non-cash incentives are also offered by many real estate brokers. These incentive programs often sway consumers to utilize their services and may include gift certificates, free inspections, assistance with moving costs, or even the costs associated with closing on a property.

To put it clearly, if you were to buy a home for $300,000 you would usually have to pay a 3% commission. However, if you were to receive a cash rebate of 1% you would be handed a check for $3,000 you could use anyway you chose. With the cost of moving and the needs in a new home, this could benefit consumers in many ways.

Many others provide incentives in an equal amount such as gift certificates to nearby hardware or home improvement stores, free home inspections, or costs associated with moving. Both rebates and incentives help brokers compete for business in a highly competitive market which, ultimately, benefits their buyers. In this way, consumers benefit from a purchase that, in many states, is no longer an option.
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When concerns began to arise, the Antitrust Division investigated and determined that these programs do not harm consumers or brokers. They felt, instead, that it could significantly reduce prices many are required to pay brokers. This was a direct result of claims that customers are often swayed into closing real estate deals that may not be in their best interests.

Those who are against these programs have made some very good points. They have expressed concerns over the fact that consumers would only buy from brokerages that could afford to offer incentives. Many people felt that this could leave to bidding wars in that buyers would only work with those who could afford to offer such incentives. It was feared that this would lead to an unprofessional appearance for the industry. The response of many states was to ban rebate and incentive programs all together.

Currently there are ten states that ban these programs and researching individual state real estate regulations can clarify whether it is offered where you plan to buy. Additionally, states such as Iowa only limit the number of brokerage firms involved in a single transaction. In states which continue to offer such programs, however, many consumers can benefit greatly for those seeking to buy a new home.

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