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Have any realtors here worked with the USAA Movers Advantage Program? I'm wondering if realtors using this program lose a percentage of their commission to USAA.
Yes they do. 35 percent of the selling or buying side of the Broker's commission is cut and paid to USAA. That is how USAA makes the money to kick back a portion to the consumer. To me it is a disservice to the selling consumer, because agents usually only agree to this cut to "use" the property to pick up buyers for other homes (sold at full commission) and increasing their inventory.
Does your office have a relocation director? How does your office handle referrals? Find out and then go make some of your own. Companies like [URL="http://www.usaa.com/"]USAA[/URL] and [URL="http://www.costco.com/"]Costco[/URL] have homebuyer and seller rebate programs where they give referrals to real estate agents. You won't get rich, thanks to the steep cost of the referrals (35 percent referral fee) but you'll be put back to work with more leads than you can handle. And that's what you want, isn't it?
It may surprise you to learn that some relocation departments actually have trouble getting agents to respond to leads because they are so concerned over giving up part of the commission. Your willingness may get you some leads that might not otherwise come your way. You'll also learn some new tricks, like blind-copying the referring relocation company's director in charge of your new client's move on all your e-mails to their client. Send homes, updates and other market information and document everything. They'll be so impressed they will ask your company to give their next referral to you personally. Go from there to working with HR directors personally. You could have a whole new specialty.
[URL="http://activerain.com/blogsview/20200/Buyer-rebates-Good-business"]Buyer rebates. Good business or potential fraud?[/URL]
On Friday, I had written a post, that facilitated quite a discussion about our commissions and how we justify what we charge. If you [URL="http://activerain.com/blogsview/19936/So-what-do-you"]read my post[/URL] and the 110+ comments, it generated, you saw that the consumer, Mr. CandiBags showed up. He asked a pretty good question, that I would like to expand upon here. How do you feel about Buyer's Agents rebating a portion of their commission to the Buyer? Well my immediate answer was that I could not care less. I am a listing side Realtor and it does not effect me at all. But then I started thinking about it. My new questions are:
[LIST][*]How is a Buyer's rebate handled without it becoming [URL="http://homebuying.about.com/od/mortgagefacts/a/bank_fraud.htm"]mortgage fraud?[/URL][*]What do you do if the rebate is not allowed by the Lender? [*]When and how do you disclose this rebate? [*]Is this rebate credited on the HUD-1 statement at closing or do you cut a separate check after closing? [*]How can companies like [URL="http://www.ziprealty.com/index.jsp"]Zip Realty[/URL], that offer rebates, overcome the legal ramifications? [*]What do you do if you got the Buyer's business, by the promise of a rebate, only to find the Lender will not allow it?[/LIST]In Florida the law states:According to Florida Administrative Code rule 61J2-10.028(2), the sharing of brokerage compensation by a licensee with a party to the real estate transaction with full disclosure to all interested parties is not considered a violation of Chapter 475, Part I, Florida Statutes What does your State's laws say about this? One more thing, as a Realtor working for the Seller, if I receive an offer for my listing and there is a disclosure stating the Buyer is going to get a rebate, should I know the amount of the rebate and make sure, the rebate plus any [URL="http://realtytimes.com/rtcpages/20010329_closing.htm"]Seller concessions[/URL], that the Buyer may be asking for, do not exceed the maximum amount allowed by the Lender i.e. 3% or 6%. And, should I make sure that any rebate is fully disclosed on the [URL="http://www.alta.org/consumer/hud1.cfm"]HUD-1 statement?[/URL] If not, could we, inadvertently, be involving our Seller in a fraudulent transaction? Buyer rebates. Good business or potential for fraud?
I'm not sure if you know this or not but we originally had signed up with USAA Mover's Advantage Program. We are big fans of USAA and do all of our banking, investments, credit card, and insurance with them. It only made sense to us that we would use their relocation program as well. But as it turns out we were grateful that we did not completely rely on USAA and their program. We were drawn to USAA and their program for a variety of reasons. USAA has great customer service and they have never let us down in the past. The thing that I didn't fully realize about their relocation service is, that the agent(s) that they assign, really do not have any ties with USAA. We actually ended up using two different agents that they had assigned to us, and were not satified with either of the agents. I had been under the impression that USAA could somehow provide a certain amount of protection and have leverage over the agents that would help us to get the best service. As it turns out this was not at all the case. The agents that were assigned to us were not special in any sense of the word. Other reasons why I really wanted to use their program was due to the fact that they offer a cash back program (roughly $200 - $1,000) and because I had fully intended to finance our loan through their bank. After doing some shopping around for mortgage rates, I was surprised to find out that the local bank rates were extremely competitive and actually a better deal. The other thing that we discovered was that the local bank was very amiable to work with us and make some concessions regarding the terms of the loan and as a result we decided to accept the offer. The money that we saved by financing with a local bank completely offset USAA's cash back incentive. Looking back on the process it has been quite a learning experience. All of our expectations of using USAA to buy/finance our home have gone unfulfilled.
I've been running across a ton of clients that are with USAA, but are very unhappy with their Realtor. When you take a referral like that, you lose 35% off the top and then you lose more in your split, so they're doing a ton of work for very little money.
The big bonus to the buyer is that USAA credits them some money at closing, but it's not much at all.
I've gotten a few clients that are unhappy with the USAA appointed agent to use me. All I have to do is credit them what USAA was going to give them. I've got a million dollar custom home going up right now and all I owe them is $1800 at closing. I closed on a $120K home earlier this year for someone and paid them $800 at closing.
My theory is that after so much money being taken off the top, the experienced agents don't think it's worth it, so the newer or starving Realtors are getting all the relo work. And while all newer agents aren't bad, most aren't very good yet.
Do the math, if USAA gets 37.5% from the realtor's commission and you get up to $1000 back tops... they are making lots more money than you are... if commissions are 3% on say a $500,000, USAA is making over $4000... and they are giving you $1000 duh!!! This isn't just a nice service because USAA is so wonderful... this is a way to make more money off you... why not reverse the split if they are going to make money off your choice you should be the one making the bigger cut... I just love the way they spin the fact they are doing this big favor... oh and by the way WHO do you think is actually paying that to USAA... the buyer pays the seller and both pay USAA effectively!!! YEA they are so nice to do this for you.
One reason folks take listings is to generate buyer leads.
One way for a new agent to get started is to take the relo referral stuff.
It doesn't matter if the relo home sells, if the agent can generate a few buyers off it.
With no reward for selling the home, the ancillary business becomes the agent's motivation.
Doesn't say much for the Seller's chances of getting top shelf service.
As a member of USAA and working with Mover's Advantage, even if they didn't rebate the money, I would work with them. Having a referral to an agent in a city where you do not know anyone and have a company vet that agent/agency for you is invaluable. Otherwise, it's like throwing darts at the yellow pages. And if you get someone you don't like, you are stuck with them.
I was given a couple of agents to interview at both ends before making my choice. The ones here were personal interviews, the ones at the other end were telephone interviews.
Our previous move was covered under a relocation package by my husband's company and we couldn't use USAA's Mover's Advantage. The realtor was a disaster and was less than helpful. And I ended up finding the house on my own altho she got to take credit for it. She actually had the nerve to inform me that the realtors in the city didn't CROSS the bridge from Wilmington to work Brunswick County (our house is 5 mins from Wilmington).
Yes, the rebate is nice but it's NOT why I use Mover's Advantage. It's the quality of the realtors that I get. And the fact that USAA is behind them for me.
Liz
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It's a money maker!!!
