The bottom line:
At the close of escrow we rebate to our buyers 20% of the commission we receive less our direct costs.
For example: A buyer purchases a home through our firm for $1,200,000. While real estate commissions are not fixed, we will be typically paid a fee of 2.5% of the purchase price for bringing the buyer and getting that buyer through his financing and to a closed escrow. This results in a commission to our firm of $30,000. We share this commission with the buyer ($6,000).
Therefore, a buyer who purchases this home in the above example through our firm will receive a rebate at close of escrow in the amount of $6,000.
Is there any “catch”?
We ask that you use our lender, Medallion Mortgage, to get your mortgage. You can easily verify that the fees and rates are highly competitive with other banks and mortgage firms in the market. By using our mortgage firm, which is 51% owned by Rich Cosner, you enable us to provide you the $6,000 rebate in the above example from the real estate commission.
And... We will ask you to rate our firm and our service on four websites. Yelp / Zillow / Trulia and Realtor.com. At closing, we will send you the links to make this very easy.
With a new business model a growing firm needs testimonials from people actually using the service. Your rebate is NOT dependent on getting “good remarks” when you share your thoughts.
The larger story:
While it is pretty popular to say in the industry that the buyers do not pay any commissions costs you can be assured the costs are built into the commission system of getting homes sold. What that means is that buyers do not pay anything up front or at closing. The commission charged to the seller typically pays the real estate agent representing the buyer. The seller pays the listing side of the commission and then a fee, usually double, to pay the broker/agent bringing the buyer. It is a system that works well for buyers in that they do not have to come up with extra money to pay their broker a fee to find them a home.
That being said, the agent representing the buyer makes great money too. In our market, most of the buy side agents receive 2.5% of the price of the property being sold. Remember that $1,200,000 home? While the listing agent likely made $30,000 for getting the listing sold, the agent representing the buyer makes a matching $30,000. Again, commissions are negotiable and perhaps the listing agent only offered a 2% fee to the buyer bringing the broker. It is still a large amount of money that the buyer’s agent is taking home.
In the past 10 years we find that more and more buyers are finding their homes on their own. They find them on Zillow, on Trulia, on Realtor.com and many find them on their brokers web site, (such as the one you are on now) which has a direct feed from the MLS. Where in years gone by a real estate agent may have shown 15-20 homes before finding the right one, today, the buyer comes to the agent with the homes they want to see in many cases. With the buyer doing much of this work, it only makes sense to let them participate in the commissions being received.
In this new model I am going to give back to the buyer 20% of the fee received.
Yes, you read that correctly. If you purchased that home through Rich Cosner & Associates you will receive a rebate of $6,000.
This is NOT an offer you will receive from the full price brokers. The last thing they want to see is their commission reduced by 20% and they don’t want all their buyers asking for a rebate like this. The big and inefficient business model of today’s real estate brokers prevents them from lowering their commissions. Besides, do you really think they would lower their fees, even if they could?
So, are you ready to think big? Most people buying a $1,200,000 home are selling a smaller one, for perhaps $900,000. In the example above, using our firm to sell their home they saved $16,800 (See Tab under Sellers for example) So, they saved $16,800 on the sale of their home and they now save $6,000 on the purchase of their next home. The combined saves are over $22,800.
They saved $22,800 by selling their home through our firm and buying their next home through our firm.
This is why we say we are:
The smarter way to buy and sell real estate