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Can I get more information on your "up to 1% cash back" (33% commission rebate) program for buyers of new and resale homes and building lots?

Contact me via e-mail billfreeman@frgnc.com or call me at 919-951-9661 or 919-338-0788

How much rebate will I receive and when will I get it?

If we represent you as your Buyer's Agent (with an executed "exclusive Buyer Agency Agreement"), you will receive up to 33% of the base commission paid to our firm.  You will also recieve up to 75% of any "bonus" commissions (those above 3%).  Our agents will let you know what the commission rates are before making an offer.  The lender or seller may place restrictions on the amount of the rebate (see below).

For example, after negotiating a low purchase price of $400,000 on a home with a 3% commission to the buyer's firm, you would receive a credit of $4,000.  If the seller was paying a $2,000 bonus (eg. for a contract before a specifiied date) and your contract met the criteria you would recieve $1,500 of the bonus commission.

The actual dollar amount will depend on the negotiated price of the house and the commission rate.  Since there aren't any "fixed" commission rates, the amount will vary from property to property.   Typical rates range from 2.4% to 3.0%, so your cash back at closing would be between 0.8% to 1.0% of the negotiated sales price.  Some commissions are lower, some are higher.

You will receive the cash back as a "Buyer's Agency credit" on the closing statement.  It is effectively a reduction in the price and reduces the amount of cash needed at closing.

How can you afford to rebate 33% of your commission?

We do NOT cut corners and we provide full service to our clients!

However, by working with you as your partner, by using state of the art technology and by eliminating  overheads (no fancy cars or big cigars!), we have driven costs out of our business and we pass those savings along to you.

What are the requirements and restrictions?

YES.  NC Real Estate Firms who represent the buyer may rebate part of their commission they receive from the seller to the buyer as long as three conditions are met:

1. the Real Estate Firm (not just the agent) must allow their agents to give rebates to their buyers.  WE DO!

2.the rebate must be disclosed as a credit from the Buyer's Agent to their client on the settlement statement, typically on lines 204 to 209 of the HUD-1(3-86) RESPA form or the recently approved new HUD-1.

3. if the buyer finances the property through a mortgage broker or banker, the MORTGAGE UNDERWRITER must agree to allow the rebate.  Recently some mortgage bankers and / or underwriters have allowed the buyer to use the rebate only up to the amount of prepaids and closing costs.  In most cases the rebate is significantly less than these charges to the buyer and there isn't a problem receiving the rebate credit.  However, in a few rare cases (eg. builder pays most closing costs) there may not be enough closing costs to offset the rebate and the lender may or may not allow the buyer use the rebate towards the downpayment.  CONTACT YOUR LENDER ABOUT YOUR SITUATION!  We will prepare a letter for you to use with you lender that explains the amount of rebate you will receive and how the credit is normally applied.

4. if the buyer does not finance the property, then restrictions in paragraph 3 do not apply.

It is very important to receive the mortgage banker's (or broker)'s and underwriter's agreement and to understand any restrictions or limitations BEFORE making an offer on a home or before the loan application.  The mortgage banker or broker can get the agreement from the underwriter.  We will prepare a letter for you to use with you lender that explains the amount of rebate you will receive and how the credit is normally applied.

What do I need to do?

If any part of the purchase price is funded using a mortgage, then before making an "Offer to Purchase and Contract" on any real estate, our firm requires that the buyer request the mortgage banker (or broker) to agree to allow the rebate AND the mortgage banker (or broker) get the approval the mortgage underwriter  to allow the commission rebate to the buyer.  The buyer also needs to have the mortgage banker explain what, if any limitations, they are placing on the rebate.

The buyer should request approval "for the buyers to receive a real estate commission rebate of 33% of the base commission paid to the buyers agent's firm and 75% of any bonus commissions paid to the buyers agent's firm".

The buyer should request the mortgage banker (or broker) to put their agreement in writing either in the pre-qualification or pre-approval letter or a seperate letter.

In the event the buyer fails to get this agreement or if the mortgage lenders do not agree or rescind their agreement, then the buyers understand and agree that the Firm and it's agents are not responsible to and may not be permitted to make any commission payments or rebates to the buyer. 

We will review with you in detail how the commission rebate program works and provide examples, including examples of typical limitations, during our first face to face meeting

How are the real estate commissions paid to the buyer's agent set in this area of North Carolina?

Each licensed Real Estate Firm has its own policies on the commisssion rates the firm or its agents charge the seller they represent and how much the listing firm and the buying firm receive.  These rates are contractually agreed upon by the Listing Firm and the owner of the property when the listing contract is signed.

Most commission rates paid by the property owner to the buyers agency range from 2.4% to 3.0% of the sales price.  Some commission rates are lower, some are higher. Occasionally, sellers (especially home builders) will offer "bonus commissions" above and beyond these rates. 

Will you commit to my program in writing?

Yes. We will put the commitment in writing in the BUYER AGENCY AGREEMENT (North Carolina Association of Realtors Standard Form 201) that we both sign.  We will review this in detail during our first face to face meeting.

Do you have a "no badgering" policy?

Our pledge to you:

• we don't badger - there is no pressure to work with us
• all information you provide is CONFIDENTIAL, we will share your information only as required by law or custom to complete the transaction
• we will enter into a Buyer's Agency Agreement only after our first face to face meeting
• we will review in detail how the commission rebate program works and provide examples, including examples of typical limitations, during our first face to face meeting