NEW HOME BUYER
KNOWLEDGE & EXPERIENCE
Stuart is a knowledgable agent with your best interest in mind. See new home buyer’s frequently asked questions answered by Stuart and feel free to call or email for further information.
FREQUENTLY ASKED QUESTIONS
SINGLE CLICK TO REVEAL STUART’S ANSWERS
In reality it is a “reduction of the cost of services” that are performed by the Buyer
Agent, Stuart B. Scholer. He is Licensed to practice real estate anywhere in Texas. Because of the normal way the Buyer Agent compensation arrangement is executed (after closing only), the price reduction for Stuart’s discounted services has to be executed at or after closing. This results in the actual movement of funds from one hand (the Agent’s) to the other (the Buyer’s). Stuart actually receives the full commission and then gives it back; either in cash and/or on paper, which usually is in the form of a closing cost contribution.
On the other hand, when selling your home and dealing with a Listing Agent, the discount is agreed upon before the listing takes place. Therefore the Listing Agent lowers the commission amount up front and states the lower cost of services on the Listing Agreement before any transaction takes place. So the discounting of services in this case do not necessitate that actual monies change hands. There are no true Rebates when you sell your home.
In some cases it might be a favor for a family member or a friend but in Stuart’s case the straightforward answer is: competition. Stuart’s costs are lower than most Agents… his Broker charges him a low flat fee because he is a volume producer. Also… Stuart only looks to get paid a fair price for his knowledge, experience and time. That’s his business model… He sticks to it. Stuart says: “I pursue more business. Not more commission!”
Yes. If the Builder is paying a cash bonus on top of the 3% to the Selling Agent then Stuart’s Buyer will receive 84% of all of that cash bonus. That is why Stuart says: “minimum 2.52% Rebate”. His Rebates START at 2.52%. NOT “up to” 2.52%”. If there is a cash Bonus then the Buyer receives their share of that Bonus. Nothing is held back or hidden. Nothing sneaky!
Stuart’s verbiage in the TAR-1501 Residential Buyer/Tenant Representation Agreement, a legal contract with his Buyers, expresses the Rebate as such:
“Broker will rebate back to Client 84% of all cash commissions paid by Seller and/or Seller’s Agent to Broker at closing. Broker shall not seek any fees or commissions from Client under any circumstances. Add $200 if Client hires TREC Inspector for 3 Phase Inspection. Rebate to be paid within 72 hours AFTER Stuart Scholer RECEIVES ACTUAL FUNDS.”
Based on a 3% total Commission… If you do the math (3 X 84%) you will see that the Rebate actually works out to 2.52% (of the 3%). But this is not the only advantage to the New Home buying consumer of getting 84% instead of 2.52%! Think about this… what if Stuart receives a 3% commission PLUS a $5000 Bonus from the Builder? If the stated Rebate is “2%” then that is what you will get; 2% of the purchase price… period! Nothing more. YOU WILL NOT RECEIVE A PENNY OF THAT $5,000 bonus! But… what if the stated Rebate is: “84% of ALL cash commission”? How much do you receive NOW? Yeah…. the 2.52% PLUS $4200!!!
So… “how you say it“ does make a whole lot of difference.
NO, NEVER. As long as the Agent compensation is at least 3% then the Rebate will be at least the 2.52% out of the 3% paid. I have done several hundred new home transactions and up until now I have never seen or heard of a New Home compensation less than 3% of the Builder’s base price.
***NOTE*** Keep in mind that ALL Builders DO NOT pay commissions on the Total Purchase Price. Some Builders pay compensation according to the Builder’s “base” price. Others pay compensation based on something in between the “base” price and the Total Purchase Price. Each Builder has their own criteria. Stuart’s New Home Buyer Rebate will always be figured at “84% of all cash commissions paid to the Broker”.
NO, NEVER! As long as your Buyer Representation Agreement Package is signed off and on file with Stuart’s Broker. If Stuart gets paid then his Client will be paid all of the Rebate promised! There are no exclusions, exceptions, excuses or eccentric reasoning. Want to see the Buyer Representation Agreement Package? Give Stuart a call and he will send it to you for your perusal.
Yes. Within the Lender’s limitations. Stuart is very familiar with the process. Sometimes the Rebate is split… part is applied to closing costs and the rest is paid in cash after closing.
Note: If the Buyer has the ability to pay all closing costs out-of-pocket then it is much easier and simpler to receive the whole cash Rebate on the day of closing. But if the contribution is really needed to fulfill the Buyer’s ability to close the transaction then everyone fully cooperates to get the deal done.
Stuart Scholer must be named as your Realtor BEFORE you sign a Builder’s Contract. All of Stuart’s info and his Broker’s info is at the bottom of this web site’s page. And YES! You may call the Broker if you wish to verify anything about Stuart.
Yes. It is permitted… as long as the Agent’s Broker permits the practice.
Yes. It is legal… TREC and others in the industry recommend disclosure to the Lender if there is one.
Yes. It is ethical. The practice harms no one and certainly helps the consumer. Most Realtor Associations have no qualms against commission rebates either. The Federal Trade Commission is very happy with the practice… Commission Sharing Rebates promote competition among Agents and help the consumer in a big way.
SEE THIS Federal Trade Commission WEBSITE page:
Stuart Scholer must be named as your Realtor BEFORE you sign a Builder’s Contract. If you sign a contract without a named Agent or are working with another Agent then you will not be eligible for Stuart’s Rebate. All of Stuart’s info and his Broker’s info is at the bottom of this web site’s home page. And YES! You may call the Broker if you wish to verify anything about Stuart .
Thought you would never ask… YES!! For new home purchases at higher price points, Stuart’s Rebates go up; starting at $475K.
*See the higher Rebates for higher priced homes*
Over $475K… 86%
Over $600K… 88%
Over $750K… 91%
Over $900K… 92%
Over $1.3M… 94%
Over $2.0M… 96%
Sometimes… but most Builders do not allow this because:
1.) for appraisal purposes they need to protect their price point in the community where they are building and selling.
2.) It creates extra time consuming paperwork for the Builder’s contract department
and also for the Lender, who has to make sure that the contract modifications will conform to the loan program. Lenders sometimes frown on the practice. There is sometimes more Builder flexibility in the lower priced New Homes where FHA financing is being used and there is more NEED and tolerance for contract modifications and higher closing cost contributions.
NOTE: ALL of the Builders allow and cooperate with the Realtor making a closing cost contribution to the Buyer when it is Lender permitted and necessary to get the deal done.
NO. Not in any case.
According to IRS publications and tax professionals it is not. But… in the case of an investment property the Rebate would count against the cost basis of the property. In such a case Stuart still does not issue a 1099. Send a note and Stuart will send you the IRS publication.
REMEMBER… Stuart is NOT a tax professional. Please consult your tax professional.
No. The Buyer Representation Agreement that you sign is a private contract between
Broker and Client. Stuart suggests you do not inform them unless necessary. If there is to be a contribution of all or a portion of the Rebate to help with the Buyer’s closing costs then all parties will become aware of the arrangement by way of disclosure by Stuart. The Builder salesperson may even ask you if your Agent is “going to make a contribution?”. *** Stuart suggests that you act dumb and not disclose this info to the Salesperson. Remember, the Salesperson is being paid to look after the best interests of their employer (the Builder) and get the best price for the property. Informing the Salesperson of the Rebate may change your negotiating position with the Builder.
Even though the Builder has their own independent inspectors, Stuart’s answer is still YES! YES! and YES!. If you want the long answer click on this link for an article on why a Texas consumer should hire their own inspector. And to back up his opinion, Stuart will kick in $200 (paid at closing) to help pay for that Inspection.