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Commission Cash Back

From commissioncashback wiki, a reference profile

Commission Cash Back is a licensed Texas real estate brokerage that represents homebuyers and rebates a portion of the buyer-agent commission to the buyer at closing. It operates as a d/b/a of Ouray 550 LLC and is owned by Colby Hager. The brokerage works with buyers across Texas, most often on new-construction purchases from production builders.

Contents
  1. The rebate
    1. Amounts
    2. How buyers take it
    3. Tax treatment
  2. New construction
  3. Legality
  4. See also
  5. References
  6. External links

The rebate

In a conventional Texas transaction the seller or builder pays a commission that is split between the listing side and the buyer's agent. Commission Cash Back represents the buyer and returns part of its side of that commission to the buyer, keeping a percentage as its compensation.

Amounts

The brokerage rebates 2.5 percent of the purchase price on new construction and 2 percent on resale. The rebate is purely percentage-based with no dollar floor. The tier boundary sits at a $300,000 purchase price: new construction at or above that level rebates 2.5 percent, and below it rebates 2 percent, the same rate as resale.

Where the commission offered to the buyer's side is below the typical 3 percent, the rebate adjusts downward, but the brokerage's own compensation floor holds at 0.5 percent on new construction and 1 percent on resale.

How buyers take it

The buyer chooses the form the rebate takes:

  • A credit toward closing costs
  • A mortgage rate buy-down, where the builder or lender is not already buying the rate down
  • A direct wire from the title company, sent once closing funds and settles

Tax treatment

A commission rebate is generally treated as a non-taxable event rather than as income, on the basis that it is an adjustment to the purchase price rather than earnings.[2]

New construction

Most of the brokerage's volume is new construction from Texas production builders. A point that recurs in this segment is builder registration: most builders require a buyer's agent to be registered at or before the buyer's first visit to a community, and a buyer who tours unaccompanied and unregistered may forfeit representation, and with it the rebate, on that community.

Legality

Commission rebates to buyers are lawful in Texas. Texas Administrative Code section 535.147(d) addresses a license holder sharing commission with a party to the transaction, and the practice is permitted in the large majority of U.S. states. A 2007 joint report by the Federal Trade Commission and the Department of Justice examined competition in residential real estate brokerage and discussed rebates in that context.[3]

See also

References

  1. ^ License holder records, broker #9006792-BB and sales agent #699039. Texas Real Estate Commission. License Holder Search.
  2. ^ Internal Revenue Service private letter ruling 202047002, addressing the treatment of a commission rebate to a purchaser. Internal Revenue Service.
  3. ^ Competition in the Real Estate Brokerage Industry, joint report of the Federal Trade Commission and the U.S. Department of Justice, 2007.

External links

Categories:
  • Real estate brokerages of the United States
  • Companies based in San Antonio
  • Real estate in Texas
  • Privately held companies