With different trends surfacing in the real estate industry, realtors use all kinds of ingenious strategies to gain more clients. Home buyer rebate is yet another effective approach to attract more business.
Home buyer rebates or commission rebates are not legal everywhere. However, in Washington D.C. and 42 out of 50 states in the US (as of May 2022), including New York, real estate agents or brokers are allowed to give commission rebates to their clients.
When buying a home, if you are working with a realtor who provides home buyer rebates, you end up getting a part of the agent’s commission as a refund. Meanwhile, this approach also helps the agent to secure more business because they offer a rebate.
Since home buyer rebates are negotiable, you might need to ask for the refund that you want. But before we jump into how you can negotiate the home buyer rebate, let’s take a look at some essential aspects related to it.
What Is a Home Buyer Rebate?
When a real estate agent refunds a part of their commission on a transaction to a buyer, it is what we call a home buyer rebate, commission rebate, or buyer’s rebate. This can result in you getting thousands of dollars returned when you purchase a home.
Usually, a buyer’s agent receives 3% as the commission. The home buyer rebate is a portion of this 3% commission of the buyer’s agent which the buyer gets at closing.
Some real estate companies or agents may provide a buyer’s rebate or cash back as an inherent perk of using their services.
Is A Home Buyer Rebate Taxable?
If you are wondering whether you have to pay tax for a home buyer rebate or not, you can take a breath of relief. Under the IRS (Internal Revenue Service) rules, real estate rebates are not considered income earned but are treated as a price adjustment.
Hence, these rebates are not taxable and this adds a benefit while buying a home from an agent who provides commission rebates.
How To Negotiate a Home Buyer Rebate?
As providing a home buyer rebate cuts off the commission received by the agents or brokers, many may refuse to provide it.
The housing market in the United States is at an all-time high, so any savings that buyers can make matter. Getting a home buyer rebate while buying a house can help you save thousands of dollars. So, it is worth negotiating and getting the best amount of rebate that you desire from the agent or broker.
There are usually two ways through which you can negotiate a home buyer rebate:
⦁ Negotiation On Your Own:
As real estate agents have to share a part of their commission with you when they give a commission rebate, many of them become reluctant to share it.
However, those who understand the essence of getting more business by benefiting their clients may readily agree to provide you with a buyer’s rebate. In case you have identified a realtor providing rebates, you can simply negotiate for the home buyer rebate that you want.
An agent may put much less interest and effort into it if you negotiate for a greater rebate. So, you need to ensure that you present an offer that the agent can willingly agree to accept.
The rule is simple – if you want something you need to offer something. You may ask the agent for the desired rebate by providing a favorable offer.
You may assure the agent that you’ll engage them largely for their expert advice and bargaining skills, and conduct a greater portion of your home search on your own.
Make sure that you also stick to the best practices for negotiating a home buyer rebate such as:
- Do thorough research so that you are prepared to put forward the best offer.
- You may ask interrogating questions and be a good listener.
- Keep your points very upfront and ask for want you want.
- Hold in mind to expect the best outcome by aiming high.
- Last, but not least, be ready to walk away if the terms are not up to your liking.
⦁ Negotiation Through a Service:
Another alternative is working with companies that provide services to negotiate real estate buyers’ rebates for you. These companies find realtors who provide home buyer rebates and compete for your business.
These companies would negotiate on your behalf and get you the best deal. You can save both time and effort by using this method instead of negotiating with the agent for the rebate on your own.
This approach is comparatively easier as you need not put much effort into negotiating the rebate. As a result, it helps you to ease your negotiating process. This’ll save thousands of dollars through your home buyer rebate.
Situations Favorable for Negotiating Home Buyer Rebate
You may have a higher chance of successfully negotiating for a home buyer rebate that you desire if:
- You use the same agent to sell and buy your property so they can get both commissions.
- You are dealing in a market where the demand is low and the number of buyers is less.
- Your agent will receive a hefty commission when you are buying a high-priced home.
- You are working with a real estate agent who is newer and less experienced. He may have trouble attracting new clients.
The Final Say
With a home buyer rebate, you may be able to save a lot of money. It is feasible to negotiate the rebate on your own, but it may be challenging and provide certain service-level concerns. Alternatively, you may negotiate it through a service if you do not want to do the heavy lifting in negotiation.
Don’t just choose the agent offering the largest rebate. But compare agents to locate the one that best suits your needs.
Get in touch with Elite Properties’ expert support here!
When it comes to dealing in real estate such as selling, buying, or transferring your home, you may encounter many technical real estate terms and jargon. You must know the difference between House Title vs Deed.
Sometimes, you may also develop ambiguity or misinterpretations while transferring, selling, or buying your real estate property due to these terminologies. That’s why it is crucially important that you know what they mean so that you have clarity in your mind about the transactions or dealings that you are making.
Such most frequently used real estate terms are ‘title’ and ‘deed’. Title and deed are terms that are often used interchangeably. However, both are different concepts.
Both deed and title are very closely connected to each other and are related to house ownership. As a result, it may cause a lot of uncertainty.
So, let’s dive deep into understanding what house title and house deed mean and how they differ.
What Is a House Title?
When you buy a real estate property, owning the title is a vital aspect of the process and is legally important while complex too at the same time.
Having a title to property implies that you have legal rights relating to the ownership of the property. In simple words, a house title isn’t any physical document. But in fact, it is a concept that stands for having legal rights under the property’s ownership.
Someone else might be able to claim that they are the rightful owner of your home and that the person who sold it to you lacked the authority to do so if you don’t have a clear title to your property.
This can lead to significant legal repercussions so you should steer clear of it at all costs.
What Is a House Deed?
A house deed is a physical written document that transfers the ownership of a property from one party to another. In other words, titles are transferred by using deeds.
Usually, in the buying and selling process of a house, the buyer and seller are required to sign this house deed in order to transfer the ownership of the property.
The person who signs the deed for transferring the title of the property is called the grantor. Whereas the person taking possession of the ownership rights is called the grantee.
Now that you are clear about what title and deed mean, let’s jump on to understand more in detail about how they differ.
What Is the Difference Between House Title and Deed?
As discussed above, the title conveys the ownership of a property and the associated legal rights. While a deed is a physical written document and represents the transfer of the title of ownership from the grantor to the grantee.
To understand the difference in a more simplified way, a deed is an actual physical document while a title is a concept. Also, a deed is a written document that is recorded officially in an assessor’s office or courthouse.
Despite their differences, it is also crucial to understand that they cannot exist apart. They both form part of the whole transfer process of the house.
When you claim you own the property it means you have title to it and have the legal rights to use it. On the other hand, a deed is the legal proof of this title and is a document used for the transfer of this property.
In a nutshell, the objective of a deed is to prove the transfer of ownership from one party to another. While the purpose of the title is to represent the legal rights to own, use, and modify a property.
A deed serves as the owner’s legal claim to the property. On the other hand, the title identifies the legal owner of the property.
Before initiating the transfer process of the real estate property, it is to examine whether the seller owns the title and can sell the property. It is also checked if there are any associated limitations on the property for sale.
This is known as a title search. To check if there are any liens or conflicting claims against the property, public records are reviewed under the process of the title search.
After checking the public records, the title examiner will conclude and create a title abstract. This title abstract will state whether the seller has ownership or not and if he can sell the property or not.
Once the seller receives the approval for a clear title, the seller can go ahead with the closing process of selling.
Further, when the deed is received, the seller can transfer the title and ownership of the house by signing it. Then the buyer signs, inheriting the title and paying off the previous mortgage loan (if any).
This is how during the closing process, the title and the deed come into play at different points.
The Final Say
A valid sale or transfer of property requires both a proper property deed and a proper title. Both are a part of the process and play a significant role at different points.
Both concepts differ and are related to the ownership of the property, despite often being used interchangeably. However, both title and deed are important to accomplish the process and hold tremendous legal importance.
Dealings in real estate become easier when you have extended support from professionals. Elite Properties, based in New York, aims to make the process of buying and selling more manageable.
Having handled the most competitive and personalized services in real estate ensures to maintain transparency. It also has provisioning information related to real estate buying and selling.
For expert support in buying and selling your property get in touch with us today!