Buyers rebate paid in escrow?

This is a question we get asked frequently.  Can we pay you your rebate in escrow instead of sending you a check after closing?

Yes, we can!  We don’t mind doing this at all, but there are certain possible complications that may arise.

The first complication is usually not a big issue but is worth mentioning.  Some traditional real estate agents are worried about the fact that we are giving you a rebate.  You see if we give you a buyer’s rebate in escrow, it goes on the closing statement.  Some sellers agents worry that their buyer will see this and demand lower fees from from them.  In the two years that we have been in business, we have never run into a complication involving this, but that doesn’t mean it is not possible.

The second complication is the most serious.  Some lenders and some loan programs will not allow us to credit  you money in escrow.  Some lenders view your ability to come up with your own closing costs, as indicator of your ability to pay your mortgage on time.  I don’t agree with this line of thinking, but I don’t make the decisions.  Also, some loan programs limit the amount of money you can have credited by your agent in escrow.

The bottom line is that if you want to get your rebate credited in escrow, talk to your lender.  If it is O.K. with them, it is certainly O.K. with us.

Andrew