As just one example of the real estate slump, Connecticut homes have declined in value in the past few years. Brokerage firms are using cash back rebates for buyers to stimulate sales of homes. The source of the cash is the broker’s portion of the sales commission. Typically, the seller’s broker gets 3 percent and the buyer’s broker also gets 3 percent. With cash back rebates, Connecticut brokers are rebating to buyers 2 percent of their commission.
If the total sales commission is 6 percent of the selling price, the seller’s broker takes 3 percent and the buyer’s broker takes the other 3 percent. With a buyers cash back rebate, the buyer’s broker keeps 1 percent of his part of the commission and gives 2 percent to the buyer. The house gets sold, and the seller is relieved of a mortgage payment he can not afford to pay on a house that is worth less than the balance of the mortgage. Both real estate brokers make some money, as opposed to none, and the buyer is happy also. In fact, everybody is happy.
Times that stretch financial boundaries require creative solutions. SGI Realty One is a brokerage firm in Connecticut that is making full use of these creative solutions in an effort to stimulate sales. When buyers are in an up side down position of owing more on their mortgage than the value of the home, they become more flexible and motivated to sell. These conditions have resulted in brokerage firms’ departure from the more traditional way of doing business.
There are two sides of this real estate coin. First home owners became nervous about foreclosure, and in many cases foreclosure did occur. Second individuals with buying potential, were able to get a lot more house for their money. It became apparent that it was to the advantage of real estate brokers to do something to generate sales. One to four percent of the commission is better than zero percent. Brokers needed motivated sellers and motivated buyers to generate some commission income.
Bethel, Connecticut is an example of the dramatic drop in home values from 2006 to 2010. In 2006, the low, mid and high prices in Connecticut were $306,000, $419,000 and $551,000. Fast forward to 2010 shows a sharp decline with low, mid and high prices dropping to $196,000, $319,000 and $363,000 respectively. Creative financing was needed to jump start slow sales.
The SGI Realty One Web site has a graphic schematic showing a flow chart with the 6 percent sales commission. The total sales commission is 6 percent, with 3 percent going to the seller’s broker and 3 percent going to the buyer’s broker. To encourage sales, the broker rebates two thirds of his commission to his buyer client. This cash rebate has successfully stimulated sales at SGI.
Your broker is motivated to get you the lowest possible selling price, which will work to offset the seller’s broker shooting for the highest possible selling price. The terms of your agreement with the SGI broker will be in writing well before the time you purchase a home. Your rebate is guaranteed.
The cash rebates that are working for Connecticut homes have proven effective in other parts of the country. With more homes on the market than buyers wanting to purchase them, the law of supply and demand kicked in and the prices of homes declined. The good news is buyers can get much more house for less money. This coupled with buyers cash rebates will hopefully help improve the real estate market.
Looking for loads more info on Connecticut homes sales and cash back rebates ? Get the ultimate low down now in our cash rebates overview.
categories: ct homes for sale
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