Thread: Offering cash back to buyers and sellers

I am interested! How can we do it and still be RESPA compliant? I know you can reduce your commission but that is not really cash back. Wayne

It's a time-deferred cash rewards program that works like a rebate. You put up a small percentage of the total reward when you issue the certificate. Since the reward certificate is not given to the customer until the transaction is completed, agents curently using this program are using part of their commission to fund it. The cool thing is, this program is so enticing to potential buyers and sellers, agents have been able to raise their fees to cover the cost. And they still appear competitive because they are offering such a great incentive.

Looking forward to your reply

I still don't understand how the program works. Could you elaborate here on the forum or with a pm. Always looking for legal and ethical ways to attract customers. Wayne

My company offers rebates to customers. The percentage of their commission is paid to us from the Realtors as a marketing fee, and then we give most of it over the to consumer. But we market it as a rebate from the commissions to the customer. That is how we stay RESPA compliant.
www.closeofescrow.com
www.efundrealty.com

Been down that road. Cannot give back commission greater than 6% to remain RESPA compliant. The concession would have to be disclosed on the HUD somewhere. Becareful if you are getting a 15% commission, the bank will question it. They know what is going on.

The following is only on Investment Property. Cannot be Primary Residence.

The only way is to have a leaseback agreement with a 3rd party. developer pays 3rd party $xxxx

3rd party pays the owner a fixed amount over a period of time until all funds have been released. 3rd party takes a fee for services.

Just a bit more complex than that, but do not want to get into trouble with the law...

The above is not a license to commit fraud. Have representation review your arrangement. Protect yourself! If you are the agent and were instrumental in coordinating an unlawful act, you can be prosecuted even if your name does not appear on any papers.

EVERYONE wants to do these deals because it is very lucrative. Unless you are doing 100 deal a month and making $1,000,000+ month, and can afford a very expensive attorney, forget it.

Also, we have found a couple of builders that approached us to do these transactions and wanting to play ball, were actually working with the Feds on a Sting operation.

The agents using Cash Rewards Inc. are only charging 1% more than usual to cover the cost. It takes about 1/2 % to fund the rebate and the agent pockets the other half. You can find out more about this program at the website Cash Rewards Inc. If you have any more questions, you can email me at a.taylor@onsitesat.com with your contact info and I would be happy to explain anyhting over the phone.

Originally Posted by REbuyersgroup

Just a bit more complex than that, but do not want to get into trouble with the law...

The above is not a license to commit fraud. Have representation review your arrangement. Protect yourself! If you are the agent and were instrumental in coordinating an unlawful act, you can be prosecuted even if your name does not appear on any papers.

EVERYONE wants to do these deals because it is very lucrative. Unless you are doing 100 deal a month and making $1,000,000+ month, and can afford a very expensive attorney, forget it.

Also, we have found a couple of builders that approached us to do these transactions and wanting to play ball, were actually working with the Feds on a Sting operation.

This is perhaps the finest advice I have read on this forum, in any catagory.

When greed enters the room, it's fall better to leave as fast as you can.

After all, who cares to be stung in a sting opertion? Can you say, "court," "jail," "fines," "legal fees," and the best is for the last, "IRS."

I'd rather be a viewer of "Court TV," than a case.