Buying a new home that no one else has lived in can be really exciting. However, new construction is often very expensive. It is not at all uncommon for home buyers in competitive markets to be priced out of the new construction housing market. New construction is always very attractive to home buyers but can price out those who don’t have a huge budget to work with or who have trouble coming up with the money for upgrades and other costs.
However, if buyers look for agents or brokers who offer a buyer commission rebate, they might be able to finally get into the new construction home of their dreams. This effective cash-back tool allows buyers and sellers to benefit as housing deals are closed.
How Do New Construction Sales Deals Work?
In most cases, a large company or group of investors builds new construction homes. These homes are often offered for sale as empty lots and then later as completed spec homes. The cost of the lot and the cost of the home itself can vary depending upon the location in the development and the housing plan that is assigned to each lot.
Home buyers often want to pick out custom elements for the house as it is being built, but these usually cost extra. Negotiations with the selling entity might be possible, but things can bog down in competitive markets. Builders know that they will not have trouble selling their homes to other buyers and might back out of the deal if negotiations are too intense.
What is a Buyer Commission Rebate?
A buyer commission rebate is essentially a cash-back offer that is part of the commission structure of the home sale. If you choose to buy a home from an agent who offers this perk, you, as the buyer, will get some money back during the closing of your housing purchase. This money can be applied to closing costs, to buy down your interest rate, or potentially upgrades in the home, and other things like furniture purchases.
The buyer commission rebate comes back to the buyer out of the commission that is paid to the the buyer’s agent from the builder. This is one of the most effective ways to incentivize home purchases and make housing more affordable for those looking to buy.
What is the Benefit of the Buyer Commission Rebate in New Construction Purchases?
The buyer commission rebate allows those looking to get into a new construction home to be able to afford to buy. In most cases, this commission is enough money to help cover costs related to closing, to buy down your interest rate, or to help with upgrades to the home that were paid out of pocket during the build.
Builders often also have preferred lenders that can offer similar incentives such as money towards closing costs or a lower interest rate. Savvy buyers are able to take advantage of both and can often get a lower interest rate from the preferred lender AND all their closing costs paid by the buyers agent. This can save them thousands in both the short and long term by saving up front and getting a lower monthly payment.
The buyer commission rebate is also a very helpful tool for those selling homes as it increases the interest in properties and helps to connect motivated buyers with sellers. Being able to turn around a housing sale quickly in a new construction area is good for the buyer and the seller. Conglomerates and large construction companies are always motivated to sell fast and will typically welcome these kinds of deals to help sell their homes.
Is the Buyer Commission Rebate Legal?
This kind of cash-back offer to buyers is legal in nearly every US state. This is one of the best ways to make housing affordable for those who are looking to buy in today’s housing market. While costs have gone up exponentially over the last ten years, the cost of living has also gone up, and wages have remained about the same. Many people are struggling to buy homes, which is slowing down the housing market.
In states where the buyer commission rebate is legal, this effective selling perk makes it easier for those who are building new construction to find buyers for their homes. It also helps people break the rent cycle and finally get into a home that they can invest in for the long run. The housing market is rapidly changing, and buyer commission rebates help to make it possible for people to purchase homes in spite of these changes.
Can You Negotiate the Buyer Commission Rebate Amount?
Commissions by law are negotiable and so are rebates. That being said, when the buyer commission rebate is offered by an agent, there is typically a set amount of rebate that is offered. You might be able to negotiate some for the amount of the rebate. Not every agent will be willing to work with you on the amount of the rebate, however. You will need to enter into this kind of discussion with low expectations of being able to change the amount of commission that you will receive.
If you have an agent working on your side who is experienced with these kinds of deals, they will be able to navigate the negotiation process for you. Depending on the cost of the home in question, there might be more wiggle room for negotiations than expected. This is something that is not always required since the buyer commission can be quite large in some cases and is often more than enough to cover some significant costs for the buyers.
The Buyer Commission Rebate Can be Ideal for New Construction Purchases
If you are interested in buying a new construction home, but the cost of new housing is a problem, the buyer commission rebate might make all the difference for you. There are many agents and spec home builders who are willing to offer this perk to those who choose to buy from them. You should have no trouble finding new construction homes that offer this benefit to those looking to buy.
Your rebate amount can be used for many different things, from paying your closing costs to buying down your interest rate or potentially even to covering the cost of upgraded carpets, counters, and more. Getting into a brand-new home that no one else has lived in can be really exciting! If you thought that this dream was never going to be a reality, the buyer commission rebate can make it possible.
