ARE ALL NEW HOME SALES COMPENSATED EQUALLY?
UNDERSTANDING NEW HOME SALES COMPENSATION
AM I REALLY GETTING THE BEST REBATE POSSIBLE?
Why is 84% better than "up to" 2.52% ? One word: Transparency!
THINKING ABOUT BUYING A NEW CONSTRUCTION HOME IN TEXAS AND YOU WANT A COMMISSION REBATE FROM YOUR TEXAS REALTOR?
DO YOU KNOW THE ANSWER TO THIS QUESTION?
WHAT IS MORE ADVANTAGEOUS FOR YOU, THE BUYER?:
1.) A “PERCENTAGE OF THE GROSS COMMISSION” ? ie: "84% of all cash commission paid by the
Seller/Builder"
2.) A “FLAT DOLLAR AMOUNT”? ie: $7500 Rebate ?
OR...
3.) A “FIXED PERCENTAGE OF THE PURCHASE PRICE”? ie: 2% of the purchase price?
Attention!
BUYERS OF NEW HOMES IN TEXAS; BE AWARE OF HOW YOUR REBATE IS EXPRESSED ON THE
TAR-1501 BUYER REPRESENTATION AGREEMENT, a contractual document approved by the
Texas Real Estate Commission and the Texas Association of Realtors for use between Texas Buyers/Consumers and Licensed Real Estate Agents .
When you are shopping for a commission rebate from your prospective Texas real estate agent, you should be aware of the fact that commission amounts that Builders pay on New Home sales are not always the same. True, much of the time, the total amount of compensation IS 3%. But yes, I frequently see them MORE than 3%, especially on Inventory Homes. Usually, the Bonus (BTSA) that a Builder pays to the selling agent will bring the total commission up to the 3.5 -to- 6% range.
So... if your Buyer Representation Agreement says the Buyer receives a fixed percentage of the purchase price as a commission rebate….say 2%. You might think you will be getting 66% of ALL of the commission being paid to your Agent. Well... what if the commission is 4%...and you agreed to 2%?
See? You will in fact, really receive 50% of all the commission. NOT 66%!! So once you understand that 3% is not always the norm, then you will realize that you really may not be receiving that 66% of all of the commission being paid by the Builder.
What is the solution? Simple… make sure that YOU, the Buyer, are receiving "84% (or more) of all cash commission paid by the Seller/Builder”. That way you don’t have to worry about not being adequately paid for all the work that YOU, the Buyer, have done in finding the right school, community, builder, lot, floor plan and a hundred other items on the list of decisions involved in buying and building a new home.
In my TAR-1501 Buyer Representation Agreement for NEW HOME purchases it states that:
"Broker will rebate back to Client 84% of all cash commissions paid by Seller and/or Seller's Agent to Broker at closing. Broker shall not seek any fees or commissions from Client under any circumstances. Add $200 if Client hires TREC Inspector for 3 Phase Inspection. Rebate to be paid within 72 hours AFTER Stuart Scholer RECEIVES ACTUAL FUNDS."
So yes! How you say it could mean a lot of money. In other words….."84% of ALL the commission"! And there are NO sneaky transaction fees or any other deductions charged to my Clients. There are NO "Lender limitations", "exclusions" or "restrictions" that could prevent me from paying YOU, my Client, all of your Rebate.
So... at 16% of the take (for me and my Broker); we are good!
*** And please keep in mind... if your purchase is more than $475K then the Rebate escalates to 86% and even higher for larger purchases (See My FAQ's).
So remember, if you are shopping for a commission sharing real estate Agent, then you should be asking… ”how much percentage of the gross commission are you going to give me?”. Then, once you have made your deal, you need to make sure it is in writing! Use a TAR-1501 Buyer Representation Agreement .
Because remember….”When ye’re talkin’ real estate in Texas… 'it ain’t NUTHIN’ unlessen it’s in writin’!”
Written by:
Stuart B. Scholer, Realtor TREC License # 498891
BROKER: 5th Stream Realty TREC License # 9005999 Broker Phone: 214-868-0707
Member of HAR, ABOR, SABOR and MetroTex
Houston, Texas 77024
Cell: 832-372-0434
For more info about Stuart’s New Home Commission Rebates in Austin, San Antonio, Dallas Fort Worth, Houston and ALL of Texas, please visit:
e-mail: Stuart.Scholer@Gmail.com