Real Estate

Real estate agent who give rebates, anyone done it?

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Deal Addict
Dec 21, 2010
1864 posts
1170 upvotes
GTA
Can I ask why you would take the cash instead of reducing the cost of the house/mortgage? I mean, if it's a few hundred/thousand dollars in cash vs the interest you're saving (assuming you aren't paying full in cash), wouldn't you prefer the long-term savings? (I'm not trying to be smart/rude, just trying to ensure I am offering the best "deal" that I can).
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Member
Nov 25, 2011
425 posts
63 upvotes
Toronto
You mean me? Yeh it made the entire thing a much easier and simpler transaction - after I buy, you give me $x. No complications. When you're buying in the crazy market that is Toronto I didn't want anything to make my offer less attractive and I felt that most selling realtors/their clients probably wouldn't understand the concept (if people understood this or knew this was possible, they probably wouldn't be paying realtors 5%).

In addition to this, I have a completely open mortgage as it's partially funded by a secure LOC. So I can put the money on to the mortgage if I want and reduce my interest anyway ;) Or I can not - I have the flexibility.
Deal Addict
May 19, 2005
1261 posts
273 upvotes
Richmond Hill
loriblum wrote: Personally, I prefer to do a "rebate" this way:

Negotiate a certain price. Have it accepted. Reduce the price accordingly (ie 1%) and have the sale price reflect that amount. In the end the client will be paying less on the house, the seller will be paying less in taxes, I will be paying my brokerage less as my new rate isn't subject to the cash-savings and I will owe less in taxes.
Reducing the sale price gives a false representation of the actual sold value when future buyers in that neighbourhood use it as a comparable. For example: The agreed selling price is $500,000; but if you reduce it by 1% it'll show up sold as $495,000; future buyers for a similar property will think $495,000 is the market value, which is not accurate. It's better to give the 1% as a credit to the Buyer(s) on closing, in my opinion.
Penalty Box
Aug 11, 2005
4175 posts
1432 upvotes
Just go on zoocasa.com and use any of their listed agents for easy cashback. You'd be a moron to not use a cashback realtard nowadays.
Member
Feb 8, 2010
326 posts
35 upvotes
Toronto
I interviewed four RE agents for my last RE sale, and three of four offered discounts. One would be foolish to pay full price, as the competition between agents is fierce, as they are a dime a dozen. Keep in mind most agents want to hide the fact they are offering a discount/rebate to their employer/brokerage, so will prefer the cash back method, even though they get taxed on the full amount as income. Say they give you a $5K kickback, it is costing them $6K.
Deal Addict
Dec 21, 2010
1864 posts
1170 upvotes
GTA
pennywize wrote: Reducing the sale price gives a false representation of the actual sold value when future buyers in that neighbourhood use it as a comparable. For example: The agreed selling price is $500,000; but if you reduce it by 1% it'll show up sold as $495,000; future buyers for a similar property will think $495,000 is the market value, which is not accurate. It's better to give the 1% as a credit to the Buyer(s) on closing, in my opinion.
Not true. A savvy buyer will always ask to look at the CB's commission as it is always posted right on the listing.

If you go by face value and don't ask the right questions or don't take the time to look through those comps, then you will never know the true value anyhow.

As well, considering many MANY CB fees differ, you NEED to fo the legwork (or trust your rep to show you the proof) before coming to a true valuation.
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Member
Aug 16, 2007
228 posts
47 upvotes
canuckchris wrote: I interviewed four RE agents for my last RE sale, and three of four offered discounts. One would be foolish to pay full price, as the competition between agents is fierce, as they are a dime a dozen
+1

I had similar experience: With me as a buyer, ALL 3 agents I talked offered 50/50 commission split right off the bat. One of them even pulled a contract out of his desk, with the commission split clause already handwritten in.

Only suckers pay full commission. This goes for both buyers and sellers.
Deal Addict
Feb 5, 2009
2808 posts
940 upvotes
Newmarket
In this situation why does one need a buyer agent at all? Just make an offer without agent reflecting the 2.5% off the price.
I have done that without any issues, some agents wanted full price and then wanted to pay us full cash back, others were ok with it, and I am pretty sure some want both commissions ;-).

If the house is already found and no BRA signed why do you need any agents?
Newbie
Jun 12, 2008
21 posts
7 upvotes
How can you arrange house visits without an agent? Also I'm a first time buyer and I don't think I'm comfortable to make it without an agent at all.

As for me, I prefer to have a cashback instead of reducing total purchase price because I'm planning to do some little renovations aftewards. $5000 will definitely help there.
Thank you for your answers, I would be gratefull if anyone can shed some light on exact cashback calculation and how it should be defined/declared on all papers.
Deal Expert
User avatar
Aug 2, 2010
15196 posts
5016 upvotes
Here 'n There
Homerhomer wrote: In this situation why does one need a buyer agent at all? Just make an offer without agent reflecting the 2.5% off the price.
I have done that without any issues, some agents wanted full price and then wanted to pay us full cash back, others were ok with it, and I am pretty sure some want both commissions ;-).

If the house is already found and no BRA signed why do you need any agents?
Exactly. And it's so easy to find a house using MLS and the other services these days.
Sr. Member
Oct 20, 2009
718 posts
326 upvotes
Toronto
I recently purchased a property and my real estate agent gave me a couple thousand dollars back on my condo purchase. No complaints at all and was able to use the cash on my lawyer fees.
Deal Addict
Feb 5, 2009
2808 posts
940 upvotes
Newmarket
xelan wrote: How can you arrange house visits without an agent? .
call the phone number on the listing.
Deal Guru
User avatar
Mar 31, 2008
13010 posts
3095 upvotes
Toronto
yummie wrote: No, as long as you have given me the authority to represent you
Can the buyer represent themselves and get that 2.5%? Or the buyer can't be his own agent and thus voids the 2.5% commission of the contract?

Or, let's say I buy a house with only my name on it. I designate my wife as my agent since she knows more about the house buying process. Can she collect on that 2.5%?

Heck, for that, it's best to just take the courses and learn as much as you can to do it yourself. You can help friends out, and literally just ask for like $200 bucks or something for a nice dinner out.
Deal Expert
User avatar
Aug 2, 2010
15196 posts
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Here 'n There
Represent yourselves, save 2.5
Deal Guru
User avatar
Mar 31, 2008
13010 posts
3095 upvotes
Toronto
eonibm wrote: Represent yourselves, save 2.5
But doesn't that mean the Seller agent has to sign a check to you? Since even if you represent yourself, the selling price would be the same, Selling agent gets 2.5%. Thus the remainder goes into the seller's pocket and not to the buyer (I doubt the seller would just lower the price to help the buyer on this).
Deal Expert
User avatar
Aug 2, 2010
15196 posts
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Here 'n There
The seller knows that there is no buying agent so they know there is no 2.5% to pay. So, they can accept a price 2.5% lower. The seller's agent cannot get the other 2.5% unless there is a buyer's agent!
Deal Addict
Dec 21, 2010
1864 posts
1170 upvotes
GTA
Actually, the truth of the matter is that there are many ethical and unethical Realtors. If you decide you want to purchase on your own, you won't ever know if you are going to be getting a straight answer on how much the seller's broker is earning. Why? Because simply put, they don't have to disclose it.

What you need to ensure is that you are paying a price that you are comfortable and happy with above all else. Unless of course your ultimate goal is to just screw the Realtor's out of a commission, then you do what you need to do to make it work for your situation. Otherwise, you can ask, but they don't have to tell. Just the same as saying it is 2.5% to the buyer's agent. You don't KNOW this for certain.

As well, I want to reiterate that "signing a check back" is not always the smartest way to do business as the cost of the overall house increases, thus you are paying more in interest (unless you are paying it all in cash), the seller will pay more in taxes, etc... etc... etc...

High Ho, High Ho, it's off to work I go! Happy Sunday RFD'ers! :D
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Deal Fanatic
May 5, 2008
6315 posts
3092 upvotes
Manitoba
So is the norm now 2.5 percent total for an agent to sell your house?
Deal Addict
Dec 21, 2010
1864 posts
1170 upvotes
GTA
That is always subject to what you and negotiate with your rep, however 2.5% is quite typical for the selling agent. As a dual buying/selling agent, you can often work a better deal out, but again, at the discretion of the people involved.

5% total is also still the most common, however many reps will offer some wiggle room.
Award Winning Realtor - I LOVE MY JOB!!
At the end of the day, you're the boss and need to make sure I'm worth your rate of pay!
Deal Fanatic
May 5, 2008
6315 posts
3092 upvotes
Manitoba
loriblum wrote: That is always subject to what you and negotiate with your rep, however 2.5% is quite typical for the selling agent. As a dual buying/selling agent, you can often work a better deal out, but again, at the discretion of the people involved.

5% total is also still the most common, however many reps will offer some wiggle room.
Thanks..I thought I was doing good at 3 percent total. I wouldn't pay any more than 3.
Agent double ended on the deal anyways, which I am sure he worked into his favor

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