FAQ about commission rebates

1.)  Q: How do I get the minimum 2.52% New Home Rebate anywhere in Texas?

A: 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 page. And YES! You may call the Broker if you wish to verify anything  about Stuart 

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2.)  Q: What exactly is this "Houston Realtor Rebate", "San Antonio Commission Sharing  Rebate",

 "Austin Realty Rebate" or "Texas New Home Rebate"?

A: 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 realized (at closing  only), the price reduction for Stuart's discounted services has to be realized at or after closing also. 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, any  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. Generally there are no true Rebates when  you sell your home.

3.)  Q: Why would a real estate agent give back or "share" part of their commission?

A: 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!".

4.)  Q: Is it possible to receive more than a 2.52% New Home Rebate?

A: Yes. If the Builder is paying a BTSA (Bonus To Selling Agent) 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!  

Example: Builder pays a 1% BTSA on top of a 3% commission  for a 4% total commission... then the Rebate will be about 3.36%.    ( 4.0% X 84%= 3.36% ).

5.)  Q. Is it possible to receive more than an 84% New Home Rebate?

A: 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... 90%

Over $900K... 92%

Over $1.3M... 94%

Over $2.M...    96%

6.)  Q: So... what is Stuart's Rebate? 2.52% or 84%? 

A: 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.

7.)  Q: Are Stuart Scholer's New Home Rebates ever less than the 2.52% out of the 3% paid by  the Builder??

A: NO, As long as the Agent compensation is at least 3.00% then the Rebate will be at  least the 2.52% out of the 3% paid.  NOTE: Stuart has done several hundred new home transactions  and up until late 2020 he has always received 3% or more as compensation. But now there are a few Builders that are paying 2.00% compensation. In those cases Stuart 's  Rebate is the same... "minimum 84% of ALL my commission". 

 ***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. Some pay the commission based on 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". 

8.)  Q: Are there any provisions in Stuart's Rebate that would disqualify or prevent a Buyer from 

receiving all or a portion of the Rebate?

A: 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.

9.)  Q: Are New Home Rebates legal, permitted and/or ethical in Texas? 

A: Yes. It is permitted... as long as the Agent's Broker permits the practice. Many Texas Brokers do not permit their Agents to use a model that is similar to mine. That is their prerogative. 

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:

https://www.justice.gov/atr/rebates-make-buying-home-less-expensive 

10.)  Q: May I use the New Home Rebate to pay towards closing costs?

A: 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.

11.) Q: May I use the Rebate to lower the purchase price of the property? 

A: 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 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.

12.)  Q: Does Stuart give his Clients an IRS 1099 for the money he pays his Clients? 

A: NO. Not in any case.

13.)  Q: Is the Rebate considered income by the IRS?

A: 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.

14.)  Q: Do I have to inform the Builder that my Agent is going to give me cash back?

A: 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.  

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15.)  Q: Should I hire my own independent inspector for my new home construction? 

   A: Even though the Builder has their own independent inspectors, Stuart's answer is still  YES! YES! and YES!.  If you want the long answer go to the ARTICLES tab and read the 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.

               16.)  Q: Can a First Time Homebuyer receive a Real Estate Commission Rebate along with a First Time Homebuyer Grant?

    A: In most cases yes but a Buyer should inquire with the grant program to be sure. You might not be permitted to use it for closing costs. You may have to receive the Rebate after the close.   

New Home Rebates in Austin.

New Home Rebates in Dallas

New Home Rebates in Houston

New Home Rebates in San Antonio

New Home Rebates Anywhere in Texas!

First Time Homebuyer Grants in Houston Metro Area

Stuart B. Scholer

 is a Licensed Agent of:

5th Stream Realty, LLC

7941 Katy Freeway # 787 

Houston, Texas 77024

Broker Phone: 214-868-0707

Broker License # 9005999

Stuart’s License # 498891

Stuart’s Cell: 832-372-0434

E:mail: Stuart.Scholer@Gmail.com