FAQ
Q. What kind of service do you offer?
A. We offer full service brokerage representation!
Q. What markets do you serve?
A. We now cover the entire State of Texas! We have agents physically located in and covering the Houston, Dallas-Fort Worth, Austin, and San Antonio markets.
Q. What is the difference in you and a "normal" real estate agent?
A. We aim to offer BETTER service than any other "normal" agent out there! We are FULL SERVICE Realtors® who have a proven track record of helping buyers and sellers around Texas on the buy or sale side, and we LOVE helping our clients save money! The average agent closes about 4 to 6 deals a year. Over the past two years, we have closed over 70 transactions per year, so we have so much more experience than the average agent.
Q. How do real estate commissions work in Texas?
A. In almost all residential transactions in Texas, sellers contact an agent to list their property. Although no regulations mandate existing commissions, the majority of sellers pay a total of 6% in commissions. At closing, the seller initially pays this 6% to their broker, who in turn shares a portion (most of the time, half of the 6%, or 3%) with the agent who represents the buyer.
Red Pear Realty believes that this system of paying 3% to each agent no longer makes sense, and are happy to list homes for a REDUCED FEE and offer REBATE services for our buyers.
Q. I want to buy a home. Why can't I just represent myself and keep the commission? Or hire an attorney to draft the contract for me?
A. Consider the following:
- The Seller's Agent is NOT obligated to pay a commission or reduce their commission if the buyer has no representation in a deal. In most cases if the Buyer is unrepresented (in our estimation, 99 out of 100), per the contract between the seller and the seller's broker, the seller's broker keeps the full 6%, and the buyer missed out on professional representation.
- When an agent agrees to represent a seller, their primary, fiduciary duty is to represent their client's interests above everyone else's. If you represent yourself, you are fighting an incredible uphill battle against a professional that is not representing your best interests, and you are much more likely to lose out on more than just 3%.
- This is why "Pocket Listings" are so valuable to selling agents. Instead of placing these listings immediately on the MLS and fully advertising them, the selling agent attempts to find a buyer from within their own network so that they can keep the full 6% commission for themselves. Many sellers and buyers are never the wiser to what is really going on when they buy or sell a Pocket Listing.
- Attorneys are knowledgeable in the law and contracts, not current aspects of and conventions of the real estate market. We have represented several attorneys whose focus is real estate law, who come to us for representation because of our knowledge of the real estate market, not just drafting contracts.
Q. What is the best way to see a home in person during my search?
A. You have four really good options:
- Go to an open house.
- In the Austin, Bryan-College Station, Houston, and San Antonio markets, a Red Pear Realty agent can show you a listing for a flat fee of $150 per showing, payable upon showing.
- If you are outside of one of those markets, or prefer to view a home with a contract agent, we can help you arrange a showing in any Texas location for just $100.
- (Please note that if you sign a representation agreement with another agent, Red Pear Realty can not help you until the terms of that agreement are satisfied.)
Q. How can I use my commission rebate?
A. There are several different ways to use your commission rebate at closing:
- To cover closing costs.
- To buy down your interest rate on your loan.
- To reduce the purchase price of the home.
Q. Why aren't more people doing this type of thing?
A. We don't know either!
Q. Who should NOT use Red Pear Realty's Rebate or Reduced Fee Realty services?
A. People who don't like saving money! (But seriously, those looking to buy/sell/lease commercial, should seek brokerage services with individuals who specialize in those arenas.)
Q. If I'm selling, can I offer less than a 3% commission to the buyer's agent?
A. Absolutely. The unfortunate reality though, is that your home won't get the same attention that it would if you offered buyers agents 3%, and it will either take longer to sell, or may not sell at all.
Q. I've signed a representation agreement with another agent. Can you do a rebate or reduced fee service for me?
A. Unfortunately, we cannot help you until the terms of your existing representation agreement are fulfilled.
Q. What's the MLS?
A. The MLS, or Multiple Listing Service, is a computer database system set up by REALTORS ® to help them market real estate within a certain geographic area. It also keeps track of historical data for properties that have been listed in the past. The MLS is an incredibly powerful tool that can be used by REALTORS ® for all kinds of micro and macro information such as pricing, home measurements, commissions offered, market trends, etc.
Q. What happens if a seller offers a bonus to the buyers agent?
A. Typically, sellers offer 3% of the purchase price to buyers agents. When we represent buyers, we keep 1% for our services and rebate any remaining base commission offered back to our buyers. If a fixed or percentage bonus is offered above the typical 3% commission, then we would rebate our buyers 2%, and the remaining commission offered would be paid to Red Pear Realty.
Q. My lender says I cannot use my full commission rebate. Then what happens?
A. Almost all of the lenders we work with have no problem helping our clients maximize their full commission rebate at closing, and we probably referred you to some of them when we kicked off the contract process. In our experience, there are some shady lenders who will tell buyers that they will have no problem using the full commission rebate up until right before closing because they don't want to put in the effort with you to do what it actually takes to complete that promise. And because of their laziness, when that isn't the case, and all hell breaks loose right before closing, it causes a lot of stress and problems for you, the buyer, and us, your fiduciary, and frankly, isn't fair for anyone. Further, it puts us in a very tricky situation with Federal RESPA guidelines, TREC rules, and the IRS. So, as a policy, going forward, if your lender pulls the "you can't use your full commission at closing" card on you within one week of closing, then we will retain any portion of your commission rebate that the lender will not allow you to use in addition to our typical 1% fee. In short, please work with your lender to make sure you get your full rebate well in advance of closing. Again, we are more than happy to refer you to a lender who will have zero issues getting you your full commission rebate.