What to Tell a Buyer About Their Rebate Before the Lender Cuts It

A platform called Homa moved into Texas offering buyers up to 2% back at closing. The Close explains why your buyer may not actually see that money. Fannie Mae treats the agent as an interested party, so a rebate applied to closing costs runs into a cap — 3% if the buyer is above 90% loan-to-value, 6% between 75 and 90, 9% below that, and 2% on an investment property. The tightest cap lands on exactly the buyer a rebate attracts: the one putting the least down. And a concession can never exceed the buyer's actual closing costs.

A buyer is going to ask why another brokerage offers 2% back and you do not. The instinct is to defend your fee. Do not. The stronger and more honest answer is that a rebate is not guaranteed cash — it depends on state law, brokerage policy, lender review, and the buyer's own final closing costs, and it can be capped before it ever reaches them. Then give them the numbers, because the numbers make the point better than the argument does. The interested-party contribution limits are tiered by loan-to-value, which means the buyer most attracted to a rebate — the one putting the least down — sits in the tightest tier at 3%. A buyer at 75% loan-to-value or below has room at 9% and will probably never hit the cap. Same advertised rebate, completely different outcome, decided by something neither you nor the platform controls. The second line to memorize is the one about structure. Undisclosed contributions made outside closing can make the mortgage ineligible for sale to Fannie Mae, which is a far bigger problem than a smaller credit. That is the reason every dollar goes on the settlement statement and through the lender, with no exceptions and no side arrangements. Say that out loud in the consultation, because it is also the cleanest demonstration you will get that you know how the money actually moves.

1. Write the four interested-party tiers on a card — 3% above 90% LTV, 6% at 75.01% to 90%, 9% at 75% or lower, 2% investment — and keep it with your buyer consultation materials.
2. When a buyer raises a competitor's rebate, answer with what a rebate depends on rather than with a defense of your fee: state law, brokerage policy, lender review, and their final closing costs.
3. Never structure any credit outside closing. Every dollar goes on the settlement statement and through the lender.