I am a Realtor and I offer a 50% rebate yet noone seems to get the concept that you get 50% of my commission?

Question

I offer any customer that uses me as their Realtor to buy any property listed with any company, 50% of my commission as a buyers rebate. And I am good at what I do yet nobody seems to understand that by using me they are going to save thousands in closing cost. Does anyone have any idea as to why nobody seems to want to get half of my commission to apply to closing cost , when I provide the same service as any other Realtor in my area.

Some of the comments are way off target, I am very good at my profession, I just left a position as the inside sales manager for one of the biggest companies in my area and was handling over 200 transactions per year. I offer my customers full service from start to close. The reasons I offer the rebate is I recieve 100% of my commission so I can afford to pass the savings on to my customers who I do care about, and the rebate allows people that may not be able to come up with the high cost associated with closing on a piece of property the chance to buy a home. In Florida it is perfectly legal to offer this rebate as long as all parties are aware in the sales contract and on the HUD1. As far as other Realtors not letting me show a property they would be reported that minute to our local association which would then make them remove the listing from the MLS for not cooperating with another brokerage.

Answer 1

I am the owner of a small "discount" brokerage that used to offer the same rebate a few years ago. I since have switched to paying the buyers 1st months mortgage payment.

A rebate of any kind (50% commission or 1% cash back) is not tangible to the average consumer - My experience has been that the biggest question is "whats the catch?" try offering something more tangible and less confusing - it has worked out very well for us.

A side note: You can rebate as much of your commission as you want to your client, it is not against RESPA. Don't listen to the agents at big office companies, they are brianwashed by thier brokers as a way to combat "discounters".

Feel free to contact me, thier is a group of us that has a monthly conference call.

Tony
www.hqhomes.com
www.cabellahomeloans.com

Answer 2

I think some people may be seeing 50% and thinking 50% of sales price, then think it must be a scam. If you're taking 3% fee, maybe market it as 1.5% rebate, and give examples (300K house, $4500 rebate).

The Realtor I use offers 1% rebate, and that's why I use her. I bought my first two houses without Realtors and didn't really see the need to use one until I ran across this. I figured why not - I'll get 1% back, and have someone to do all my paperwork for me. So far, I've bought one house with her and am in the option period on another.

Good Luck!

Answer 3

I think the confusion may lie in that most buyers do not expect to pay a commission to an agent representing the buyer. I also think you are affected by current market conditions. Currently, there is a tremendous glut of real estate brokers because of the former hot market, so it is difficult to get listings. 50% off also seems a little high, and it may connote the impression that you are not worth being hired. I disagree with one of the prior answers that all real estate brokers do is "fill in the box." You show value as a broker by demonstrating to your clients all that you do to assist them in a sale.
I suggest that you reduce the amount of the commission rebate to 10%, and knock yourself out showing your clients how you are not just the same as other brokers, but superior. The best opportunity to do this is during the inspection and disclosure. Be very particular, and be thorough in what you identify. Don't rely upon other reports. Take a lot of pictures, and then set up a time with your clients to go over each observation when you give them your written report. This is how you maintain relationships, and get referrals.
Good Luck.

Answer 4

Homebuyers in OC, are being offered a Brand New 2006 Mercedes if they sell a home, purchase a new home, and let the agents office broker the new loan. The target clients they are going after know how this Mercedes is going to be paid for.

In your case, you dont seem to target selling/buying. Most likley first time buyers is your target market. Offer a incentive they can relate too. " At close I will cover your moving expenses/ Home Dept Card/ Cash" and a disclaimer it is calculated at 50% of the comission you are paid.
Take note, real estate prospects are dwindling due to the interest rates making the clients entire finacial picture unstable. A buyers mortgage payment is only a fraction of thier payments due each month.

Answer 5

I work in real estate investing, and as you have undoubtedly already seen - the housing cycle is probably the slowest cycle in the business world. This is because people are very old fashioned when it comes to housing - they are very particular with the process of purchasing real estate. If it does not fit into their very narrow definition of how to buy and sell real estate, then they are extremely wary of doing it. Plus, I am sure that your 50% off comes with a decrease in services rendered. You probably ask that the buyers find their own properties first before you represent them as the Realtor. Now with all that info being available online, what you offer is perfectly reasonable. Most people are going to look for prospective houses online first anyway.
On another note, you are going to meet with a lot of resistance from Realtors in the big name companies. They see you as a hack who are stealing their customers, while not offering the same securities that they offer. They will try to cut you out of the deal whenever they can, and sometimes they will refuse to let prospective buyers look at a house if they know you represent them. It is going to take a while for people to accept this as a legitimate avenue. Be patient, advise your customers to be cautious about telling house sellers who is representing them, and keep your overhead extremely low, because it may take a while for your business to take off. I am always willing to listen to more, so give me a holler in the future if you like.

Answer 6

Maybe you could try rephrasing the offer. Instead of saying a 50% discount, maybe it would be more appealing if you said you charge a 3% commission instead of 6%?

The other problem may very well be that since you are the broker and not associated with a bigger name company like Remax, Keller-Williams, etc. then maybe people are concerned about using your services. Maybe they are concerned with the quality of an unknown real estate company that offers such a discount. Why be in business for yourself? Wouldn't it be much easier to work for one of the bigger real estate companies if you are just going to cut your commission anyway? Seems to me that you would end up making about the same money and not have to worry about all aspects of the business - you could just concentrate on sales.

Answer 7

Offering a "rebate" is illegal in most states. You can only give a referral and that's to another licensed Realtor. Have you checked with the RESPA Federal disclosures on what you're doing?

And not knowing you, but just from what you've written, you sound cheap and desperate. Any successful agent wouldn't need to offer anything like this.

Answer 8

First, I believe it is not legal to give a commission to someone who is not a licensed real estate person.. That may be a reason for a segment of your audience. Second, it sounds maybe too good to be true. Third, if you are good at what you do, and you tell people this, you wouldn't need to be offering this type of arrangement. People may think this in the back of their mind, and have second thoughts about using you... People want and expect great service. Give them that, and you may not need to make these type of offers.... Just my take on it. PRIZE...

Answer 9

As a Realtor, my response is that it sounds like you're a discount brokerage. That's a terrible promotion in that you sound like you're paying people to use you.

You should be promoting your knowledge, not your fees! It frustrates me to see some of these negative answers posted here and it is the fee promotion that starts them. Realtors are paid for knowledge and experience, which isn't coming across in your advertising.

I think the public sees you as a new in business Realtor looking for business and who wants that?

Answer 10

Change the rebate thing to something else. Say 50% off closing costs, people think of rebates and they think HASSLE, as they have to mail something in and might not get it.