Deriving Advantages From The Real Estate Cash Rebate System
Buying a home involves many people and the key agents charge a commission on the sale. This makes it a highly competitive business where customers are coveted. Originally the real estate cash rebate program was designed to draw customers when the market saw a downturn. Brokers realized that many were buying homes during difficult economic times and wanted to provide their customers with ways to save money while earning a steady income themselves.
Ten states have currently banned this program based on many reasons. One involves the fact that they felt unfair competition would be generated between brokers of means and those who couldn’t really afford to lose the money. It was felt that this would result in unfair practices. However, the majority of states continue to provide this program which can save consumers thousands putting cash back in their pockets. This money can be used for anything.
Non-cash incentives are also popular with brokers. With this option, instead of cash, buyers can receive free inspections, gift certificates, and even discounts on closing costs. This can save a huge amount when one considers the cost of the home, closing costs, moving costs, inspections, and many other factors that can affect the bottom line.
Putting it into more simplistic terms, if you were to buy a $300,000 home, the commission would usually be around 3%. If you were to receive a 1% cash rebate, you could receive $3,000 at the end of the sale. When you realize all the costs involved with buying a new home, having that amount of money to spend as desired can alleviate many concerns.
For many people the incentive program is preferred. Gift certificates can be provided that covers many needs including home inspection, hardware or home improvement, or even the cost of movers. Whether a cash rebate or incentive, both customers and brokers benefits especially when the market is highly competitive. Although customers benefit in many ways, many states no longer allow this incentive.
Although some argue that these programs can sway consumers into closing on real estate purchases that may not be in their best interests, the Antitrust Division has found no proof that this type of business is harmful to buyers. In fact, it can ultimately significantly lower the price that many pay for brokerage services.
However, some good points are made against such programs such as the fact that consumers would only buy through those who offer incentives. It is felt this would create bidding wars that could get out of control and lead to competitive behavior which could appear unprofessional. The states that ban rebates have instituted laws to control this behavior.
Currently there are ten states that ban these programs and researching individual state real estate regulations can clarify whether it is offered where you plan to buy. Additionally, states such as Iowa only limit the number of brokerage firms involved in a single transaction. In states which continue to offer such programs, however, many consumers can benefit greatly for those seeking to buy a new home.
Interested in taking advantage of the Connecticut Real Estate cash rebate program ? Get inside info now in our Cash Back Offers overview.
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