Get Cash Back At Closing…Legally!

States shown in white indicate that rebates are allowed and states in yellow indicate states where they are not allowed. Now that we all know this, there are three quick questions that need to be asked before we go any further. (see large map blow)

Question 1. is for Real Estate Agents: Do you offer rebates?Question 2. is for Sellers: Do You know rebates have been proven to entice Buyers and that rebates are absolutely legal in all but 12 states?Question 3. is for Buyers: Are you aware that there is a way for you to save money on a home AND get cash back at closing?

In this dismal real estate market, it seems that all kinds of promotions and “out of the box” marketing needs to and should be happening to move property. Then why are we not seeing more of the rebates put in action to move the inventory that is just sitting there stagnating?The rebate marketing is available on any property that offers a commission to a real estate agent. So any property, REO, property in foreclosure, or anything listed can avail itself of this marketing vehicle. So why is it not being utilized on a mass basis?

Lee Iaccoca took over a failing automaker and turned Chrysler around with great marketing. Most of his marketing was built around consumer rebates. Iacocca helped establish the cash rebate as a major marketing tool in the U.S. auto industry when he appeared in over 60 commercials during the 1980s.

In September 2003 American Express in marketing the launch of its “Blue Card” offered rebates up to 5%.

While there may indeed be negative implications resulting from rebates utilized on an extended, long term basis, there is no doubt that when an industry is struggling in both sales and in public perception, that rebate offers excite consumers.

So Realtors..what gives? Why are so many adverse to implementing a rebate program to provide an incentive to Buyers? Why, if in all but a few states, this kind of campaign can be implemented are more houses not being sold with rebates to the Buyer?

Now don’t tow the party line and tell me or the American consumer that it ends up being more expensive, it’s simply not true. How many Sellers are even told that this is an option? I shudder to think how few Sellers even know this is available.

Let’s say I am selling my house. I put it on the market for $300,000.00. I, through my listing agreement am offering 6% commission. That means $18,000 is coming off of my net. Out of my bottom line. Now I find out my house is taking a long time to sell. I ask my agent if there is anything I can do. I am told it’s just a tough market and I need to lower my price.

No…what I need to do is lower the commission and offer the buyer an incentive to but my property. So here’s what we’re going to do.

1. We’re going to keep the price at $300,000.00
2. We are going to offer a qualified Buyer a cash rebate of $7,500.00
3. My Agent and the Buyer’s Agent (if any) are going to split the remainder of the commission
( as the Seller, I really don’t care how it gets split up)
4. If My listing Agent won’t do this, then I will terminate my listing Agreement

More than likely most homeowners are locked into a horrible listing agreement and they are at the mercy of the agent to bow out gracefully ..like that’s ever going to happen.

Then I can remarket my property with a cooperative agent and offer a real incentive to a Buyer.

Sound like a plan? Why Not? It’s better than sitting around waiting for something to happen and being told to keep lowering my price.

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