Save money when you buy a house
Buy a Property and Get Money Back Through Commission Rebates
If you have ever purchased real estate listed through an agent, then you are familiar with the concept of commissions paid at closing. Typically the seller pays a commission to the broker for their agent, who in turn pays a portion of the commission to the buyer’s broker. What you may not know is that in Pennsylvania it is possible for a buyer’s agent to rebate part of the commission back to the buyer at closing, which would reduce the overall cash the buyer needs to purchase the property. This is called a commission rebate.
In the past, an agent would create a list of properties for the buyer to consider and then drive him or her around to see them all. Information on properties was not easily accessible to anyone but the agent. Of course the internet has changed all of this. Listings are now widely available for free to anyone with an internet connection. Many savvy home buyers now discover their own properties through public MLS searches or websites like Zillow.com. If you discover your own property of interest the traditional brokerage model gives you essentially two choices. You can contact the listing agent to represent you as a “dual agent,” which means the agent will represent you and also the seller (interestingly this is not considered a conflict of interest for real estate agents in Pennsylvania). Alternatively, you can call another agent to represent you as a buyer’s agent. Either way, you found the property but your agent and their broker keep the commission.
Insight Realty acknowledges that the way buyers find properties has changed and offers a 50% commission rebate. The first step to working with Insight Realty is locating a property that you are interested in and contacting us to set up an appointment. Today, anyone can search the MLS online. For example, here is a link to a publically available MLS search website: www.edshieldsrealtor.com/mls.aspx. Other sites like Zillow allow you to set custom searches that alert you to newly listed properties and price changes in a specific area. Zillow even allows you to draw your own area on a map and alerts you either daily or immediately if a property is updated.
If you want to submit an offer, Insight Realty provides even more services than a traditional agent. You would be represented by a broker who is also an experienced real estate attorney. This makes a big difference because instead of simply being a salesperson, an attorney is trained and qualified to represent your best interests. An attorney will draft and perform a detailed review of your offer and answer any legal questions you might have. This also removes the possibility of a conflict of interest through dual agency because an attorney could never represent both sides of a transaction the way that an agent could. In addition, if you decide to close through our closely affiliated settlement company, Dornish Settlement Services, LLC, Insight Realty will also be involved with the closing process and everything will be kept in house. The best part, of course, is that at closing you will receive a rebate of 50% of the buyer broker’s commission, which would usually amount to 1.5% of the total purchase price.
Real estate investing is a competitive venture. Multiple competing offers are frequently the norm for purchasing distressed properties like foreclosures. What if you could offer more for a property than your competition, but end up paying less? This would lead to doing more deals. Insight Realty’s commission rebate program can give you a competitive advantage. Additionally, one often hears brokers telling real estate investors that they should get their real estate license and bring it to that particular brokerage. The advantage to the investor is that there will be a commission paid to the investor when they purchase a property. The commission percentage paid to the investor often starts at around 50 percent until a certain threshold of sales is met. There are of course additional fees that the investor must keep track of, such as insurance, franchise fees, desk fees, continuing education, Realtor association dues, etc. The investor must also do all the work of a real estate agent and deal with other agents. Instead of going this route, the investor would do better by simply obtaining a commission rebate through Insight Realty.
For more information visit Insight Realty’s website at www.InsightRealtyPittsburgh.com, call David M. Tkacik, Esq., broker of record at 412-414-9644 or email at Dave@InsightRealtyPittsburgh.com and start saving money today!
(December 2014 Newsletter)