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kpasad, Home Buyer in Cupertino, CA

buyers rebate (santa clara county, ca)

Asked by kpasad, Cupertino, CA Sat May 5, 2012

Here is south san fracncisco bay, silicon valley, someone recently told me that some buyers agents share about 1% of their buyer agent commission with the buyer. I looked up the department of justice and the practise is legal and encouraged. I wonder what the catch is. What should be aware of if i decide to go with such an agent?

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Hi Kpasad and thanks for your post.

A rebate to a buyer is absolutely legal and, while there is no legal impediment to allowing this, there are few Realtors who do this. I do provide a rebate--anything over 1.5% offered to the buyer's agent. Thus, a 3 percent commission results in a 1.5% rebate to the buyer. There are, of course, limitations to rebates--but those are issues we can discuss if you are interested. Read my blog for more information on rebates.

In order for a rebate to be legal, here are the items that are required:

1. Rebate should be specified in the buyer broker engagement contract
2. Rebate must be clearly stated in the offer
3. Rebate should be reported to the buyer's lender
4. Rebate must appear in the closing statement
5. Buyers may not normally use the rebate as part of the downpayment for the home

In addition to the above, there are situations in which a rebate is not allowed: 1) short sales and 2) bank foreclosure sales. In these cases, because the bank controls the amount of the commission to the buyer's agent, when a rebate is specified, the bank will simply lower the commission to the buyer's agent and will NOT allow any money to go to the buyer.

If you have any other questions about rebates or would like to talk with me about buying or selling a home, do give me a call.

Sincerely,
Grace Morioka
Area Pro Realty-Peoples Choice
Tel (408) 426-1616
2 votes Thank Flag Link Sun May 6, 2012
I dont believe realtors. First they say its like asking part of our salary. Come on you are making money off selling and buying and sort of creating artifical fake economies. didnt you say 2008 was the best time to buy ? when there was a huge crash later ? , then 2009 was thought to be the lowest ? So if you are a buyer, it is your choice to make , if you want to buy a home , you have to make the decision and where to buy should be your choice , no agent will help in that. Also this seems to be more like a advertisement forum, with realtors saying we are the best. Typically we are paying so high for homes now already, with lots of costs ahead which we dont see now .. taxes, repairs , insurance etc.

Frankly to be cupertino is sort of junk, unless the home is good, why would you want to live in an eichler or mackey for sending kids to so called good schools , when actually if you see rankings fremont mission san jose is way above monta vista and cupertino high is not even in the list of best high schools (forget homestead and the junk fremont high). So it is all realtors instilled fear and rumors , they earn from transactions, so frankly low inventory hurts them the most.

So to all the great agents who think cupertino is best .. as a home owner in cupertino , why do you think i should pay to the buyers agent or even listing agent , i know i can sell the house like you all say there are multiple offers (basically multiple offers is the what is the case in all bay area). So i think its time to take out the realators out of the equation, specifically if you are in mission san jose fremont, or cupertino , what do you realtors say !!!!

I am mostly saying this to the arrogant realtors who think they "deserve" to keep everything.

Also @Robert, i think what you are doing is more foolish, you think you have the power , soon you will be offering more for people, its realtors like you who irritate me. As a home seller, I would not recommend you to anyone. I want the best price, not the person who comes through you ..
1 vote Thank Flag Link Sun May 6, 2012
Does your Plumber or Mechanic kick back to you too?
1 vote Thank Flag Link Sat May 5, 2012
I know I sound like a broken record, but it's all about agent stats. Full service or full discount doesn't matter if they can't deliver on results. A buyer agent should be proficient in putting together a strong buyers package to present at the negotiating table of the Seller. In this market, it's multiple offers almost always. A great Buyers agent possesses the knowledge to be able to advise on pricing given the multiple, and know how to "package" your offer so it stands above the rest. Think about it- 20 offers, how do you as a buyer stand out? Good representation, above and beyond. I can't tell you how many times I've been involved in a multiple offer representing the seller and it appalls me at how these offers come in. Many are not filled in completely, missing information requested (ie preapproval letters) etc.
The ones that stand out are the ones who return everything I ask for, neatly, and present a willing attitude. That winning package and winning agent will get it everytime, because that's who I want to work with.
On the sell side, it's the same but in reverse. Sellers should be looking for a strong background in successful sales at above asking prices with as few deals falling apart once they are in contract. Being #1 in the market does not mean they get #1 results for Sellers. No two realtors are the same, and it's important to look for distinguishing traits that will give you the upper hand in the market.
If I can help, feel free to contact me.
1 vote Thank Flag Link Sat May 5, 2012
Dear Holly,

I can see that you don't care for Realtors that much, but I've been doing this for 30 years and proud of my work, my clients keep coming back, so some of us are doing our jobs the right way. I have made my clients life easier, helped Buyers make good buying decisions, and helped my sellers achieve top dollar. Your assumption that we artificially induce markets isn't true, wish we had that kind of power. lending practices of the past led to the surge we saw in 2008' but why are Realtors responsible for it if we happened to be representing a client. Supply and demand, and market value are determined but buyers, sellers and lenders/ appraisers, not Realtors. Sadly everyone thinks we are making out like bandits, but with so little inventory, there just isn't enough for all realtors. We are people just like you who have been hurt by the downturn and we are hard working people going the extra
mile for our clients, and our own families. I am very proud of every transaction I have ever done, and my testimonials over the past 30 years speaks volumes for how professional realtors do their jobs. Sitting at an open house foor someone today who bought at the peak, and know that my work will help these people move on. Please try to see another point of view. All my best!
0 votes Thank Flag Link Sun May 6, 2012
Hi Kpasad,

What are you lookingfor? If one percent is what you want....how about I double it and get it from the end that should be paying you to buy .......the seller. With so many foreclosures about to hit the market and short sales supply will outperform demand and they will need to pay you and me to look at their homes.. I don't believe in giving away what I work for, but I do believe in helping you get what you want. ..talk2fabian.com
0 votes Thank Flag Link Sun May 6, 2012
It is a business decision of agents. All commissions are negotiable. If an agent decides to share their commission with you I suggest you approach the situation as you would any other you are entrusting with such a huge decision. Research. The commission should be run through the "HUD" closing statement.

I've done it in the past when it made sense. I don't do it now. With the way the market is and multiple offers, it doesn't make for a good financial business decision on my part. I just closed a buyer who had been working with a rebate agent. They lost out on several offers. They decided to terminate that relationship and they contacted me and we met. They decided to work with me. Two offers later and they are closed and in the home of their dreams.

Not all agents are the same. Regardless of their fees. I have had transactions with good and not so good agents all with different business models.

What to look out for? Here are some questions to ask.
Their knowledge of the Market
Their knowledge of the contract
Their reputation within the real estate industry
Risk Management
Do they listen to you
Will they seek out homes not on the market for you
What type of insurance do they carry
Are the full time
Do they go to broker tour and know the inventory
Do they offer a buyer consultation before working with you


Have an amazing day!
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Sat May 5, 2012
What you should be aware off is potential for being involved in a conspiracy to commit tax fraud. It depends on the exact way the refund is being processed.

Go for it an let us know how it worked for you!
0 votes Thank Flag Link Sat May 5, 2012
I would stick with quality. 1% of a $30,000 commission is not very much. If you can find a hard working quality agent and receive a legal rebate........... then you just got the best of both worlds :)
0 votes Thank Flag Link Sat May 5, 2012
Hi Prasad,

If you are looking to buy or sell in Cupertino, you can contact me at 408-691-7717. I have been serving this area for past 8+ years and my company is based Cupertino for more than 20+ years.

thanks,
Aparna
Happy Realty
Cupertino
0 votes Thank Flag Link Sat May 5, 2012
K Prasad,
Very simple, discount agent, discount service, you will not even know what you missed out on. If an agent is under-valueing themselves, their work and service, and their own pay check and willing to give you money back, how much do you think they will care about your money at the negotiating table??
How happy would you feel internally, if the person you worked for asked you to do everything you could, and give them some money back out of your paycheck??.........
A good professional Realtor will take exceptional care of details and EARN their money honorably. After all, this is a legal transaction, and perhaps the largest purchase of your life, you dont want discounted service.........end of the day, for a little bit of money back, you may loose out on a lot! I have personally seen it happen. Make your choice with deep thinking.......then its your choice.
I am happy to meet with you and go through the process of purchase, if you are willing to make a commitment to work professionally. And, i dont give money back. I value the service I give to my clients, and they stay with me for life! Wishing you the Best.
Be well and safe, regards,
Nina Daruwalla
0 votes Thank Flag Link Sat May 5, 2012
There is no catch, it's a perfectly legitimate business model that I use with great success in Southern California. Don't believe all the naysayers who are going to come on here and and tell you that you don't want someone who can't negotiate a full commission for themselves. I've negotiated myself into over 100 transactions and have saved my clients over $1,000,000. Check out Redfin in your area or Google different search terms for real estate rebates and you'll find someone. Go save yourself thousands of dollars!!!
0 votes Thank Flag Link Sat May 5, 2012
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