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Some Realtors Are Giving You 1% Cash Back at Closing Out of Their Commissions

Most Realtors over the last few years have watched the real estate market undergo a huge metamorphosis. Home prices and home values have dropped by an unprecedented rate. Short Sales and Foreclosures loom over many homeowners’ heads. And banks are not lending nearly enough to balance the numbers of buyers vs. the sellers.

In a Buyer’s market, Real Estate Agents have to act competitively in order to stay in business. A large number of Realtors have not been able to maintain and are now in different occupations. But for those who still remain a few are choosing to give up some of their commission for a sale. One example of a company doing this right now in Arizona is called Home Koala.

These competitive agents give you cash back at closing out of their commission when a deal goes through. This seems like it would be illegal, but it is perfectly legit. If the seller decides up front that they are building in a certain % commission into the listing price to be split between his agent and the buyer’s agent, then the buyer’s agent can do whatever he or she would like with his or her earnings. This is different from let’s say, a buyer asking for a larger loan than their home is worth, and the seller giving the buyer the difference in cash back.

Cash back at closing is a nightmare for most Realtors, who do not want to give up any of their commission. So why would some agents want to? They realize that they almost have to at this point. It might as well be called the ‘Extra Value Meal of Real Estate Purchasing’. And if these agents produce enough volume, their business will not suffer. Either way, it works out great for the buyer. So if you are in the market for a home, why not do some research on your real estate agent or ask them if they will give you cash back out of their commission? Or if you are lucky and are looking to buy in Arizona, you can talk to a Home Koala agent.


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