This Money-Saving Tip Saves LA Homebuyers Thousands
Homebuyers in Los Angeles often spend years saving to purchase the home of their dreams. But after amassing enough to pay for the down payment and coming up with closing costs, buyers don't always feel like they got a great deal even if they got a great price for their home.
While aspiring homeowners must stretch their cash to meet the costs of buying a home, there is a new way to save thousands of dollars on your home purchase regardless of your budget. Buyers in Los Angeles can now receive cash back on the home they just purchased by working with a modern brokerage that provides a commission refund.
Choose a buyer's agent that provides a refund
Most Los Angeles homebuyers do not know they can request cash back from their buyer's agent. And considering that most first-time buyers go with the first or second real estate agent they interview, many do not get the chance to learn what a commission refund even is. Few Los Angeles real estate brokerages offer buyer commission refunds, as it is a relatively new practice disrupting the traditional real estate agent model.
Currently, 40 US states including California allow brokers to award clients with a buyer refund, reflecting how homebuying today is more democratized and brokerage fees are becoming more consumer-friendly.
How does a commission refund work? When a deal closes, a real estate commission typically totaling 6% of the sale price is split evenly- 3% going to the buyer's agent and 3% going to the seller's agent. With a commission refund, also known as a commission rebate, a buyer's agent then gives a portion of the commission they received directly to the buyer.
The savings from a commission refund can be significant
Sellers know that part of the asking price they post builds in the broker commission and adjust accordingly to achieve the goal for their bottom line. So why shouldn't buyers adjust their tactics the same way when purchasing a home?
By working with modern brokerage that offers a commission refund, buyers can save themselves thousands and improve the economics of their purchase. Prevu provides the largest commission refund in Los Angeles, giving buyers up to 2% of the purchase price back.
For example, if LA homebuyers purchase a $2,000,000 Hollywood Hills or Los Feliz home offering a 3% buyer's agent commission, they can receive two-thirds of that, or $40,000 in the form of a commission refund by purchasing with Prevu.
The role of buyer's agents is changing
Historically, a buyer's agent was more hands-on in the research and search for listings. As such, buyer's agents justified taking high commissions in an era when real estate data was not so widely accessible. Now, home shoppers have a wealth of information available at their fingertips, and many buyers take control of their early search and begin looking for listings online.
As a result, buyer's agents serve a different purpose in today's market - acting more as an expert through the important process of touring houses and making offers in the later steps of a buyer's journey. Some brokerages take this a step further, offering buyer clients powerful digital platforms to centralize their search and home buying process all in one place.
By providing buyers with all of the tools they need, digital platforms like Prevu enable buyers to stay up to date on the latest listings in their budget with property alerts, request tours with the click of a button online, ask questions via convenient messaging, and collaborate online about their offers with their agent.