I got $4k back when buying a NEW home...

[andrewWynn]

You can get an agent to represent you when buying a new home.

The benefit is that the agent gets a commission from the builder (2-4%).
Some agents will split this with you.

In my deal, I bought a 250k home. Agent got about 10k in commission from builder. He gave me 4k. I got a 1099 at end of year to file as income.

There's no catch. This is a little known secret but it's out there. Just ask the agent or shop around.

 

[Juno]

 

[MisterJackson]

Where's my iPod beeyotch?!?!

 

[spidey07]

So rather than the proper thing of negotiating their cut, you took the max commision and now you have to pay taxes on it?

lose/lose.

 

[CPA]

I had something similar, but it was actually advertised by the company. I actually got money from my realitor and the realitor of the seller (custom home builder).

 

[Double Trouble]

Originally posted by: spidey07
So rather than the proper thing of negotiating their cut, you took the max commision and now you have to pay taxes on it?

lose/lose.

I think you misunderstand. Lets say the builder sells the home for $300,000. They will pay the agent representing the buyer a comission (usually 3% or so, or about $9000 in this example). If you represent yourself, you still pay $300,000 for the house, but get no comission. If you "negotiate" with the agent to take a smaller cut (lets say 2%), you still pay $300,000 for the house, but the agent gets $6000 instead of $9000. You still get nothing.

You can't negotiate the rate the builder pays to the agent representing the buyer, so it's up to you to negotiate with the agent representing you in the purchase such that they agree to pay you a portion of the comission, which is then reportable income to you.

Sounds like a win for the OP to me.

 

[slikmunks]

if the builder is going to get paid 9k less for the agent's commission, wouldn't a good negotiator be able to purchase the home for maybe 4 or 5k less than what it would have been sold for otherwise?

 

[JulesMaximus]

Why should an agent give you back part of their paycheck? That's how they earn their living.

 

[Double Trouble]

Originally posted by: slikmunks
if the builder is going to get paid 9k less for the agent's commission, wouldn't a good negotiator be able to purchase the home for maybe 4 or 5k less than what it would have been sold for otherwise?

No. Builders are very careful not to do just that, because then agents representing buyers will no longer steer their clients towards that builder. Trying to reduce the price based on the fact that the agent will get less or that there is no agent involved is usually a dead-end, except for certain unusual situations.

 

[KoolAidKid]

Why did you use an agent to buy a house from a builder?

 

[Whoozyerdaddy]

I don't think it's legal for an agent to split their commission with the buyer unless the buyer is a licensed real estate agent. Then again, the rules might be different in your state or the agent's office has worked out the legalities of such a transaction.

But as far as I know, it's not legal.

 

[Double Trouble]

Originally posted by: JulesMaximus
Why should an agent give you back part of their paycheck? That's how they earn their living.

Often if you are an experienced buyer that doesn't need a lot of handholding and won't take up much time for the agent, they will recognize that and figure they'll get a very nice paycheck for not much work. They know that if they say "no", you can simply try another agent and find one that will agree to a deal.

 

[OutHouse]

Originally posted by: Whoozyerdaddy
I don't think it's legal for an agent to split their commission with the buyer unless the buyer is a licensed real estate agent. Then again, the rules might be different in your state or the agent's office has worked out the legalities of such a transaction.

But as far as I know, it's not legal.

thats what i was thinking.

 

[Ameesh]

Originally posted by: spidey07
So rather than the proper thing of negotiating their cut, you took the max commision and now you have to pay taxes on it?

lose/lose.

you clearly didnt get it.

 

[Double Trouble]

Originally posted by: Whoozyerdaddy
I don't think it's legal for an agent to split their commission with the buyer unless the buyer is a licensed real estate agent. Then again, the rules might be different in your state or the agent's office has worked out the legalities of such a transaction.

But as far as I know, it's not legal.

Technically the agent is not "splitting" the comission with the buyer, they will agree to some sort of 'reward' or 'reimbursement' system where they pay you a certain sum. My buyer agent also did something like this, in effect giving me part of the money they made off the transaction as "thanks" for working with them.

 

[O2Deprived]

Originally posted by: Whoozyerdaddy
Technically the agent is not "splitting" the comission with the buyer, they will agree to some sort of 'reward' or 'reimbursement' system where they pay you a certain sum. My buyer agent also did something like this, in effect giving me part of the money they made off the transaction as "thanks" for working with them.

Essentially, they gave you a nice house-warming gift.

Sigh, I just got a brass plated door knocker!

 

[xSauronx]

Originally posted by: tagej

Originally posted by: Whoozyerdaddy
I don't think it's legal for an agent to split their commission with the buyer unless the buyer is a licensed real estate agent. Then again, the rules might be different in your state or the agent's office has worked out the legalities of such a transaction.

But as far as I know, it's not legal.

Technically the agent is not "splitting" the comission with the buyer, they will agree to some sort of 'reward' or 'reimbursement' system where they pay you a certain sum. My buyer agent also did something like this, in effect giving me part of the money they made off the transaction as "thanks" for working with them.

mine sent me a thank-you card.....hmmmm

 

[777php]

This is a very common practice nowadays especially since the housing market is doing poorly. Many agents out there are advertising that they will give you back xx% of commision upon closing.

 

[halik]

Originally posted by: andrewWynn
You can get an agent to represent you when buying a new home.

The benefit is that the agent gets a commission from the builder (2-4%).
Some agents will split this with you.

In my deal, I bought a 250k home. Agent got about 10k in commission from builder. He gave me 4k. I got a 1099 at end of year to file as income.

There's no catch. This is a little known secret but it's out there. Just ask the agent or shop around.

Hmm or you could've dealt with the builder company and save 10K ?

 

[Double Trouble]

halik, see my earlier post. Builders will generally not negotiate with you to reduce the sale price when no comissions are paid. It's bad for business since that makes upsets RE agents.

 

[mugs]

Originally posted by: tagej

Originally posted by: spidey07
So rather than the proper thing of negotiating their cut, you took the max commision and now you have to pay taxes on it?

lose/lose.

I think you misunderstand. Lets say the builder sells the home for $300,000. They will pay the agent representing the buyer a comission (usually 3% or so, or about $9000 in this example). If you represent yourself, you still pay $300,000 for the house, but get no comission. If you "negotiate" with the agent to take a smaller cut (lets say 2%), you still pay $300,000 for the house, but the agent gets $6000 instead of $9000. You still get nothing.

You can't negotiate the rate the builder pays to the agent representing the buyer, so it's up to you to negotiate with the agent representing you in the purchase such that they agree to pay you a portion of the comission, which is then reportable income to you.

Sounds like a win for the OP to me.

Sounds right to me :thumbsup:

My mother-in-law is a real estate agent. When we buy a house, she'll give us all or part of her commission. If we didn't use a real estate agent at all, the seller's agent would get all of the commission.

 

[FoBoT]

i really just want a free iPod with my house

 

[JulesMaximus]

Originally posted by: tagej

Originally posted by: JulesMaximus
Why should an agent give you back part of their paycheck? That's how they earn their living.

Often if you are an experienced buyer that doesn't need a lot of handholding and won't take up much time for the agent, they will recognize that and figure they'll get a very nice paycheck for not much work. They know that if they say "no", you can simply try another agent and find one that will agree to a deal.

Well, IMO agents who do that are either poor agents or desperate. My wife did that once a few years ago and it was the worst mistake she ever made. She worked her ass off to sell this guy's house and only made like $2k off the deal. She's also had deals that went smoothly that she got a full commission on. She won't undercut her pay though, if someone wants a good realtor they should expect to pay them for their services.

You don't expect your auto mechanic to cut his fees down on the repairs he does to your car do you? How about your credit card companies? Do they cut the interest rate on your credit cards because they don't have to do much work to loan you the money?

 

[mugs]

Originally posted by: JulesMaximus

Originally posted by: tagej

Originally posted by: JulesMaximus
Why should an agent give you back part of their paycheck? That's how they earn their living.

Often if you are an experienced buyer that doesn't need a lot of handholding and won't take up much time for the agent, they will recognize that and figure they'll get a very nice paycheck for not much work. They know that if they say "no", you can simply try another agent and find one that will agree to a deal.

Well, IMO agents who do that are either poor agents or desperate. My wife did that once a few years ago and it was the worst mistake she ever made. She worked her ass off to sell this guy's house and only made like $2k off the deal. She's also had deals that went smoothly that she got a full commission on. She won't undercut her pay though, if someone wants a good realtor they should expect to pay them for their services.

You don't expect your auto mechanic to cut his fees down on the repairs he does to your car do you? How about your credit card companies? Do they cut the interest rate on your credit cards because they don't have to do much work to loan you the money?

Bolded the important part of his post.

If they don't need to spend as much time on the deals, thus they can do more of them and end up with more money, how does that make them a poor agent or desperate?

 

[JulesMaximus]

Originally posted by: mugs

Originally posted by: JulesMaximus

Originally posted by: tagej

Originally posted by: JulesMaximus
Why should an agent give you back part of their paycheck? That's how they earn their living.

Often if you are an experienced buyer that doesn't need a lot of handholding and won't take up much time for the agent, they will recognize that and figure they'll get a very nice paycheck for not much work. They know that if they say "no", you can simply try another agent and find one that will agree to a deal.

Well, IMO agents who do that are either poor agents or desperate. My wife did that once a few years ago and it was the worst mistake she ever made. She worked her ass off to sell this guy's house and only made like $2k off the deal. She's also had deals that went smoothly that she got a full commission on. She won't undercut her pay though, if someone wants a good realtor they should expect to pay them for their services.

You don't expect your auto mechanic to cut his fees down on the repairs he does to your car do you? How about your credit card companies? Do they cut the interest rate on your credit cards because they don't have to do much work to loan you the money?

Bolded the important part of his post.

If they don't need to spend as much time on the deals, thus they can do more of them and end up with more money, how does that make them a poor agent or desperate?

Because a most agents worth their salt wouldn't do that.