August 05, 2020
Homebuyers can often spend years saving up to purchase the Philly home of their dreams. In addition to amassing enough for your down payment, coming up with closing costs which can total as much as 4 or even 5 percent of the purchase price of a home, can also tack on time to your savings timeline.
There are ways to stretch your budget when mortgage rates are low so you don’t have to compromise on features you want in a home, however there is one tip that can save you thousands of dollars on your Philly home purchase regardless of your budget.
That tip is to receive a commission rebate when you buy!
One of the biggest mistakes homebuyers make is not asking for a commission rebate from their buyer’s broker. This is especially true for first-time buyers. The majority of real estate brokerages do not offer buyer commission rebates. As a result, many buyers are not even aware they can benefit from the savings of a commission rebate.
There is a half-truth perpetuated by traditional real estate agents that it is “free” to be represented as a buyer. Unfortunately, this is where the industry has been very misleading. The word “free” is meant to distract buyers from how much traditional buyer’s brokers actually make per transaction. While real estate commission may not be a line item on the closing statement for a buyer, it is still coming out of your pocket as you, the buyer, show up with all the money.
The trick to make sure you leave the closing with a check too, and not just the brokers, is to hire modern, tech-enabled brokerage, for example Prevu, whose business model includes the financial benefit of buyer commission rebates.
The concept of a commission rebate is very straightforward and can save you thousands on your purchase. A real estate broker rebates a portion of their commission to the buyer they represent. While commission rebates are legal in 40 U.S. States, including Pennsylvania, most traditional brokerages do not offer these money-saving rebates.
Prevu offers the largest rebate in Philly by giving two-thirds of the buyer’s broker commission directly back to homebuyers with their Smart Buyer Rebate. In a typical Philly home sale, the listing broker receives a commission of 6% of the sale price, and is then split evenly, with 3% given to the owner’s broker and 3% given to the buyer’s broker. That means, you could receive up to 2% of your purchase price cash back from Prevu.