01-05-2009 09:23 AM
01-07-2009 11:37 AM
The Redfin rebate comes from the commission paid to the listing broker to sell their property. A portion of that agreement is offered for co-broke with a buyers agent and is paid at the time of close to that agent. In the case that it is Redfin we receive the co-broke commission and then refund you the money either in the form of a reduction in purchase price, a credit towards closing costs or a tax free rebate 7-10days after the closing. I hope that answers your question and please let me know if you have any further questions and thank you for the post.
01-07-2009 11:45 AM
Can you send a link to information showing how you rebate it off the HUD1? I know you all found a clever way to do it. I have a letter from HUD1 saying every part of the transaction has to be on the HUD1 and disclosed to the lender.
I think you call it a "refund of professional services". Is that right?
Do your rebates, that are paid after closing disclosed to all parties including the lender?
Oftentimes lenders won't allow too much cash back, regardless of it being a rebate or a seller subsidy.
Thanks for the clarification
01-07-2009 04:56 PM
In the past two years Redfin has provided over $20,000,000 in refunds to 2,200 plus buyers without issue. Redfin receives all of the Selling Office Commission for each transaction. We then rebate a portion of the commission to the buyer via separate agreement with the buyer that is not a part of the home sale transaction. The rebate is disclosed to our buyer's lender and we work with the lender if they have any questions or concerns.
The majority of lenders we work with have no questions around the rebate but some do request that the rebate amount be applied as a credit to closing costs rather than having it disbursed directly to our client. In this event we work with the lender and the client to make sure that the rebate is provided in a structure that works for all involved.
Vice-President, Real Estate Operations
12-13-2011 04:07 PM
Hi Douglas, the rebate works the same way whether Redfin is the listing agent or not. We rebate up to 50% of our commission as the buyer's agent to the buyer. This page on Redfin has more information, and I'm happy to answer any questions you might have.
12-13-2011 04:18 PM
Generally we'll refund 50% of our commission to the buyer. However, we do need to collect a minimum of $6,000 which is why I say "up to 50%" because for lower priced homes, or homes with smaller commissions, you want get the full 50%. The average refund is about $7,500.
12-19-2011 12:35 PM
I was wondering about that as well Frank , what perecentage of rebates are actually credited on the HUD vs paid after closing. If required by lender to be credited on the HUD the rebate has the potential to be reduced to nothing if the buyer is already capped out as far as "allowable" credits in the transaction, the key is to confirm before the offer is written if the credit will be on or off the HUD ot manage buyer expectations. Anyone know specifically the loop hole that allows the rebate off the HUD? Do local laws have any impact?