What do realtor rebates and the 70s rock band Twisted Sister have in common? The answer may surprise you.
“You never learn anything by talking.”
This is a realization that Jay Jay French, the lead guitarist of the 70s rock band Twisted Sister, learned at an early stage of his career. Jay Jay claims that he often found himself in situations where he had to convince, and sometimes prove, to bar owners that they were making substantially more money when his band played as they tried to undercut, and not pay him is share of the value that he was bringing in.
Eventually, he hired a friend to sit at the bar and count, secretly, the paying customers through the use of a hand clicker. Jay Jay then used this information to start negotiation. Ranging from realtor rebates, to getting the highest price on your home, a lower phone bill, or even asking for raise a the office – negotiation is everywhere.
As a result, it is imperative to understand realtor rebates, because if you don’t, you could be leaving thousands on the table.
So let’s examine first, what exactly is a realtor rebate, second delve into negotiation tips, tricks, and tactics, before finally exploring actionable next steps and solutions to strike the perfect balance of emotions, logic, and silence.
What is a Realtor Rebate?
A realtor rebate is known by a few different names that all basically mean the same thing: Realtor Rebate, Buyer Rebate, or Buyer Agent Commission Rebate.
According to the United States Department of Justice, “commission rebates are usually calculated as some fraction of the broker’s commission and can result in thousands of dollars being returned to the consumer”.
Therefore, when a buyer purchases a home, a large part of the purchase price goes to pay off commissions to the agents involved. The buyer agent typically receives a commission equal to 3% of the home purchase price. A buyer agent commission rebate is a portion of the 3% commission that the buyer agent will rebate to the buyer at closing.
Basically, this all breaks down to – money that your buyer agent will refund to you at closing.
Since buyers are not licensed, agents can’t pay them a commission. However, they can rebate part of their commission to the buyer as an incentive.
Looking for a Realtor Rebate?
You have two options: first, negotiate yourself, or second, use a free service who’s already done the work for you.
1 – Negotiate Yourself
The strength/background of your negotiation skills will ultimately decide the amount of the rebate you receive. If you’re a risk taker and would like to go this route, here are some tips to get you started from a combination of negotiation consultants & neuroscientists: Ed Brodow, Jeff Haden, Tara Swart, & Lisa Barrett.
- Be willing to walk away. In any situation, the person who cares the least has the most power. It’s vital to not appear desperate for a deal. If you buy a car/house the first time you see it, it’s a guarantee that you’ve paid too much.
- Shop around. If someone doesn’t offer you what you want, keep looking. Are you seeking a great deal on a loan? If your local bank, or credit union, is giving you a hard time try a competitive nationwide mortgage company.
- Talk to your friends, family, neighbors. What has their experience been like? Have they been in similar situations? Have they ever negotiated anything like closing costs?
- Ask for what you want. Nearly everything in life is negotiable. Try using “I statements” vs “You statements”. Being assertive and being aggressive are very different. Think critically and challenge assumptions based on what you are taught and told. If they say they have the best title company, how do you know that’s true?
- Listen. Ask probing questions. Then, listen to understand the other person not to get your message out. Ask open ended questions and then apply the 70/30 rule. Listen 70% of the time and avoid asking questions where they can provide a yes/no answer.
- Aim high and expect the best outcome. Have you ever seen the show Pawn Stars? If owner of the pawn shop wants to pay $4,000 for an item, they’ll start by offering $3,000 knowing the other person will counter higher with something like $5,000. At this point, then the owner could re-counter back down to $4,000 his original, ideal price.
- Do your homework. Seeking out any, and all, especially free information is the safest bet. The higher the purchase price of the home, the higher percent of the rebate you should be getting back at closing.
- Let silence speak. Don’t use too many words and be aware that over-explaining yourself puts the other person in a powerful position over you. When someone makes an offer, or asks you a question you don’t like, simply don’t reply. Your inaction will cause others to seek confirmation. Treat disinterest with amplified disinterest. You’ll be amazed at the result.
2 – Work with a Free Service
There are companies out there, like Transactly, that will do the negotiating for you in real estate. Finding out which agents offer realtor rebates and compete for your business is our business.
For example: Want an up to 1% buyer agent commission rebate back at closing? Want to sell your house with an agent who offers full-service for 1.5% on the listing side? That homework has already been done.
Sure you could spend the time practicing negotiation strategies, getting your rebate in writing, and approved by your lender, but how valuable is your time? We’ve already done the negotiating for you – and our service is free.
All agents are not made equal. Because of this, it would not be wise to pick an agent based on one factor alone of – does this agent offer a realtor rebate? A bad agent, with a rebate, could still cost you far more than an agent who doesn’t offer a realtor rebate.
After all, the research is complete, now just let the agents compete.
Find a buyer agent that offers a buyer rebate here.