When the average person thinks about the home buying process, buying is the word that sticks out. People often approach the situation with the idea that they will have to spend money in mind. However, when rebates are involved, buyers can walk with the purchase of a home, but also extra cash. If you are not familiar with new home rebates, learn more.
One of the most common home rebate offerings comes in the form of builder rebates. These rebates often involve extra cash for the buyer if they sign a contract for a new build or spec home purchase with the builder. For example, a builder may offer $5,000 if the buyer signs a contract before a certain date.
Typically, this type of rebate may not necessarily come in the form of cash in hand. Builders will sometimes apply it as a credit at the design center for home upgrades or as a credit on your closing costs, so be sure to get all the facts.
Some real estate agents will also offer rebates to homebuyers. Real estate agents are paid by way of commission. The agent will have a set commission percentage, such as 3%, that they are paid based on the sale price of the home.
Particularly during periods when home sales are low, agents will offer a portion of their commission to the buyer as a rebate. For instance, the agent may offer a 1% rebate. In the case of a $400,000 home sale, the agent would receive $8,000 and the buyer would receive $4,000 in the form of money returned at the closing table.
With the purchase of a new home, lenders will also sometimes offer rebates to buyers. Often, large homebuilders have partnerships with lenders. If the buyer agrees to finance the purchase with this lender and is approved, the lender will sometimes offer a rebate on the purchase.
Like builder rebates, this type of rebate does not always come in the form of cash in hand. Often, it is applied as a lender credit at the closing table. Only if the rebate leaves a credit balance will you walk away with cash in hand, but the extra funds are still helpful, nonetheless.
Organizations are allowed to define the terms of their rebate agreements, so make sure you ask specific questions about what is being offered to you so that you have a clear understanding.