Mimi Foster, Voted Colorado Springs Best Realtor (Falcon Property Solutions)

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Rainmaker
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Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Not sure what you are running into Mimi, but I offer military rebates (posted on AR) to all my military clients, monthly, the last 13 years, towards their closing costs, they are allowed by lenders and applied through escrow at close. Easy peasy, legal and doing it all day long.

Jun 05, 2016 12:17 AM
Rainmaker
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Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

I have no idea, as I don't do buyer rebates. I suppose you can do a buyer credit for closing costs from agent.

Jun 04, 2016 10:45 PM
Rainmaker
573,038
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

Unfortunatly, Florida does allow buyer rebates.  I wish they didn't allow it and I don't do it,  Many buyer agents advertise it.

First of all, a buyer rebate has to be disclosed to the parties in the transaction (buyer and seller),  I am not aware that it must be on the HUD.

  • The rebate can be for services paid outside of closing...the appraisal, the home inspections, insurance etc. 
  • Or the agent will reduce thier commission so seller can lower the price,
  • Or the agent might be able to pay for the closing costs or points,
  • Or they may buy the buyer a new refrigerator or appliance etc.
  • Or they just cut the buyer a check at closing
  • Or a hefty gift card after closing
  • Or cold hard cash under the table

I wish rebates were illegle.

There was a builder that was advertising on their website that home buyers should ask their agent for a rebate or they have "agents" that the buyer can use who will rebate money....grrrr.

Eve

 

Jun 04, 2016 11:40 PM
Rainmaker
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

There would seem to be some 3rd party Enity involved ?

Jun 04, 2016 10:36 PM
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Mimi Foster I just do not do it! And I always wondered what are these loopholes - checking other responses.

Jun 05, 2016 03:16 PM
Rainmaker
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Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Not sure if the laws had changed, but my understanding was that you could rebate to your PRINCIPAL.

Jun 05, 2016 04:55 AM
Rainmaker
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Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Credits are pretty common.  You must have a very odd lender.

Jun 05, 2016 04:55 AM
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Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

See if your title company can help with this questions, they may have encountered this situation before and may know how to handle it. 

Jun 05, 2016 04:51 AM
Rainmaker
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JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Find out from the realtors answering here what wholesale lender their brokers ae using that allow what you want to do. Then ask that realtor's mtg broker to ask the account rep from the wholesale lender who the mtg brokers are near you. 

Jun 05, 2016 03:35 AM
Rainmaker
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Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

I remember Lenn Harley as a buyer's agent and continually marketing with a buyer rebate offered.... 

Jun 05, 2016 02:37 AM
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

And all you want to do is something nice.  So frustrating.

I'm sure a dinner out, or afternoon at an amusement park, to celebrate the event, about a month or couple weeks after it closed would be nice.  If you can do stuff like that for your sphere of influence, that would work.  After all, they stop being your clients when the deal is done.  They aren't clients for life.

Jun 05, 2016 01:25 AM
Rainmaker
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Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Crediting it to buyers closing costs. Some agents want to take it off the price of the house after a price is negotiated but as a listing agent I do like this practice..it devalues the house in a community and does not show the negotiated price before reducing by buyer rebate.

Jun 05, 2016 12:36 AM
Rainmaker
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

On the subject of money incentives, rest assured it gets to the person

Jun 04, 2016 11:22 PM
Rainmaker
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Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Good question.  I always assumed it was applied to closing costs but don't know the answer.  

Jun 04, 2016 10:58 PM
Rainmaker
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Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

We discussed this sometime this week about Redfin. I think it has to be applied to closing costs.

I never knew about how it was done.

Jun 04, 2016 10:56 PM
Rainmaker
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Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

That's not good IMO - I know no lender that will allow this at all!

Can't wait to find out!

Jun 05, 2016 11:00 PM
Rainmaker
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

NH only allows $50, thats it. So there could be a couple of violations here?

Jun 05, 2016 09:39 PM
Rainmaker
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Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Follow the requirements of your mortgage lender.

Jun 05, 2016 09:08 PM
Rainmaker
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Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

Mimi Foster I know what you are running into. Some lenders and some loans do not allow credits like that in escrow. In lieu of that credit you can gift the buyers with a VISA debit card for the gift amount.

Jun 05, 2016 06:37 PM
Rainmaker
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Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

dinner? 

Jun 05, 2016 12:00 PM
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Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

You can buy them a nice closing gift or give them a gift car, but only $25.00 per person is tax deductible.

Jun 05, 2016 10:19 AM
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

I don't do buyer rebates but USAA agents have been rebating for years and I think they get around it by giving a Home Depot gift card or reduction in costs on the clsoing statement. 

Jun 05, 2016 09:53 AM
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Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     Florida allows Buyer Rebates, but as you point out, it is subject to Lender Approval and disclosure on the CD.   I'm not so sure about RESPA, since the Broker is not getting a kickback from anybody.

     I could blow by this with "see an Attorney" or "I don't do rebates".  Let me say that if I need to or choose to give a rebate (it's not my normal business practice, but it happens), I can find a legal way.   Reduce the commission.  Pay for the repairs that the home inspector brought up.

    When I do give a rebate (again, rare, but it happens), I ask the Title Attorney (long time acquaintances) if I am in the clear.  It's always verbal; maybe I should start getting a written opinion from a lawyer to protect myself.

Jun 05, 2016 08:36 AM
Rainmaker
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Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Park and reading on this one.

Jun 05, 2016 07:25 AM
Rainmaker
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Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

My impression is that this is a give back is "outside of closing" which means the agent is still paying taxes on it...and may ...Lord Knows I am not the tax expert...deducting the rebate as a business expense ?

Jun 05, 2016 06:54 AM
Rainmaker
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Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

I just gave a buer a credit due to medical emergency, etc, but I had to send a note to the lender and get underwriter approval. It was designated to be usde for closing costs assistance. I'm sure you can do something after the closing, but you might have to wait a while.

Jun 05, 2016 06:30 AM
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Jeff Dowler, CRS
eXp Realty of California - Carlsbad, CA
The Southern California Relocation Dude

I have done what Nina is doing a couple of times. I'm surprised to hear about the closing cost credit. I have done several through my Heroes Home Advantage program

Jun 05, 2016 06:17 AM
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I haven't seen lenders make an issue about this in my area.

Jun 05, 2016 06:13 AM
Rainmaker
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Susan Laxson CRS
Palm Properties - La Quinta, CA
Local Knowledge & Global Network

I have often wondered the same thing and I believe they mostly apply to cash transactions (no mortgage).

Jun 05, 2016 04:55 AM
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Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

I won't have any part of it Mimi, it comes out of our commission right?

Jun 05, 2016 04:33 AM
Rainmaker
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Mimi, While I have not done it a lot .... I have done a buyers credit toward closing costs deducted from my commission ... all reported/disclosed on the HUD.  The last time I did that was about 2.5 years ago. 

I give "gifts" to my client after the closing. I feel that is between me and my "friends" and none of anyones business.  

Jun 05, 2016 04:29 AM
Rainmaker
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Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

As a non realtor, of course I don't know.  But, why don't you call a couple of realtors that do this.  Maybe find one from Redfin and maybe another place.  probably a non local agent (so no perceived conflict) but maybe one in another part of colorado.  Maybe also ask some other lenders.  Maybe ask the ones in your are who their lenders are...or look them up. sometimes those preferred lenders are listed on their ZTR profile or on their website.

Clearly there must be a legal way as many are doing it and not having issues.  It could vary by state though (obviously).

Jun 05, 2016 03:17 AM
Rainmaker
101,524
Scott Lawson
America's Home loans - Santa Rosa, Petaluma Mortgage Broker - Santa Rosa, CA
Mortgage Broker FHA, VA, refinance or purchase

"Lenders in my area will not allow a Buyer's agent to give the Buyer credit toward their closing costs"

 

Why not? Is that a Colorado thing? That's certainly not a RESPA violaton. It doesn't come up often, but I can certainly arrange that on a Closing Statement...

 

BTW, there is no such thing as a HUD anymore...

Jun 05, 2016 01:56 AM
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

I've done it a few times for members of my Frequent Buyers' Club, and have had no issues whatsoever with any lender - you do have to be certain that the entire amount, your credit and any seller credit, do not go over the lender's limit for closing cost credits in general .  And it always goes onto the HUD.  The amount is subtractred from our brokerage fee and show up as a credit in the buyer's column.  

I have done it with Wells Fargo as the lender.  I just read the other answers, and perhaps your lenders are misunderstanding what you are trying to do, because the practice is pretty widespread around the country and certainly in this area.  Or is there some quirky law in Colorado?

Jun 05, 2016 01:54 AM
Rainmaker
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Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

I have no idea Mimi Foster 

Jun 05, 2016 01:17 AM
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

They are illegal in Wisconsin

Jun 05, 2016 12:14 AM
Rainmaker
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Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

These are gray areas that we do  not involve ourselves with. I like my freedom.

Jun 05, 2016 12:03 AM
Rainmaker
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Richard Weeks
Dallas, TX
REALTOR®, Broker

I have not seen a problem when the rebates are disclosed.

Jun 04, 2016 11:54 PM
Rainmaker
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Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Mimi Foster I always heard if it's not on the HUD statement, it's not legal.

Jun 04, 2016 11:37 PM
Rainmaker
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Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Ditto Lyn Sims comment.

Jun 04, 2016 11:24 PM
Rainmaker
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Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Closing costs?

Jun 04, 2016 10:57 PM
Rainmaker
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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

It is done via a special C.A.R. form with a permission of your broker. 

Jun 05, 2016 04:44 PM
Rainmaker
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Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

 Redfin, for example , credits it back with a 1099 on all sales except Oregon and one or two states in East. Often factored in the price or coming out of realtors compensation. Agents needing work openly advertise 50% rebate. I see a bus with a huge size ad:" I gave back 50% and list for 1%". 

Jun 04, 2016 11:31 PM
Rainer
4,581
Victor Kaminski
Jersey Brokers - Edison, NJ

Check what the laws are in your state first with the DOJ and your real estate licensing authority.  https://www.justice.gov/atr/rebates

 

Your state may have its own rules on how it can be given and to who.

 

In New Jersey we could give buyers rebates as of 2009 they changed the law, 2010 they defined the rules how we can offer it and in NJ trying to advertise it makes it difficult, as if they want to prevent agencies from offering rebates to buyers the way they wrote the restrictive rules. First they passed a law making it legal to appease the DOJ then they make the advertising rules so messed up that nobody would want to because all the disclosures and they must be in type no smaller than the text in the ads headline or largest type.

 

It is true all parties must be informed of the rebate being offered, I'll do that while it's in attorney review to make sure the rebate offer doesn't compromise the buyers bargaining position after the offer has been negotiated and accepted. To me it's really none of the sellers business if I'm offering my buyer client a rebate or not but they do need to be informed.

 

Yes lenders can and do often deny the rebate for unknown reasons but I've been told because of the loan parameters that don't allow it. Some just don't know how to write it on the HUD now called the CD.

 

You must disclose in writing to the buyer that you are offering a rebate and how much it will be at the time you begin working with them, I do it in an exclusive buyer agency agreement for several reasons I wont get into here.

 

In NJ rebates can only be offered if the broker allows it and they can only be given to buyers of a primary residence and the buyer must be notified to consult with a tax professional about the consequences of receiving the rebate because they may have to pay taxes on that money.

 

Hope that helps.

 

 

Nov 07, 2017 03:12 PM
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Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

do it the right way

Jun 21, 2017 06:17 AM
Rainmaker
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Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

My recommendation to you is to assign this research task to your summer intern, a market researcher or work from home mom.. Have the intern et al  enroll in the Redfin and any agents program offering rebates and get the contractual details.

IT is your choice whether to assume to know through the guesses of others are bite the bullet and do what you need to do to get the facts.

If you discover they are delivering the rebate 'off the books' are you gonna throw them under the bus?.

Jun 05, 2016 12:15 AM