MilesBuzz! - Question about miles and selling your home.

I know there have been threads about home equity loans and where to go for the best mileage deals but there isn't much I can find about just selling your home. Does anyone have any experience with this? Any suggestions or warnings anyone can offer?

Since I've been looking into this recently, let me see if I can help.

There are several companies that seem to be in the business of referring customers to real estate agents for a fee. Part of this fee gets kicked back to the customer in the form of airline miles, rebate cards, and cash. LendingTree is one of the bigger ones. Some individual companies, including airlines, also have direct referral deals with large realtor firms.

On both AA and DL, on some deals you can get 3,000 miles or so per every $10k of home value, for buying OR for selling. (If you do both, you can earn miles on both transactions.) Some of the deals pay much less in miles.

Another FT poster found a very attractive cash-back offer from LendingTree for Costco members. The higher the amount of the purchase or sell, the better the deal is. In fact, I probably will join Costco just to take advantage of it. That way, I can avoid spending lots of time posting on FT about how I can't use all of those extra miles I acquired.

Good luck.

You are better off finding an agent who will kick back part of his commission to you. They have to do that anyway if they get referred for miles. 1% of the selling price is a reasonable kickback.

QL

You are better off finding an agent who will kick back part of his commission to you. They have to do that anyway if they get referred for miles. 1% of the selling price is a reasonable kickback.QL

While there are now all sorts of options for reducing commissions -- particularly on the sell side -- I'm not convinced that this approach works. According to real estate sites, the average total sales commission nationwide is now down to 5%. Most often, 2.5% of this goes to the seller's broker, 2.5% to the buyer's broker. In many cases, only half of each of these splits goes to the actual agent. So asking an agent for a 1% rebate when their commission may be just 1.25% is a losing proposition. Most agents don't seem to respond well to this approach. I think to make this idea work you would have to negotiate directly with the broker, which can be tough.

You can find miles for realators offes in the Home Buying section of the Finance page of my website below.

While there are now all sorts of options for reducing commissions -- particularly on the sell side -- I'm not convinced that this approach works. According to real estate sites, the average total sales commission nationwide is now down to 5%. Most often, 2.5% of this goes to the seller's broker, 2.5% to the buyer's broker. In many cases, only half of each of these splits goes to the actual agent. So asking an agent for a 1% rebate when their commission may be just 1.25% is a losing proposition. Most agents don't seem to respond well to this approach. I think to make this idea work you would have to negotiate directly with the broker, which can be tough.

A little OT, but still relevent...

While I believe the stats you quote on the average total commission being down to around 5% as well as the 2.5% that goes to the buyer's broker, I can assure you that the 50-50 split you mention between selling agent and thier firm is no longer the case. The market competition for agents, especially productive ones, has totally changed the compensation picture for real estate agents to the point where the really good ones end up paying only a monthly fixed "desk fee" and perhaps a small "administrative fee per transaction" to thier firms (Re/Max, for example), and they keep the rest (net of what goes to the buyer's agent). In fact, a brand-new real estate agent can negotiate a 70-30 split on thier very first sale, and not have to pay a desk fee in some cases.

My point is simply that there is still room to negotiate with agents for a reduction in commission rates, or a "kickback" (which is perfectly legal between agent and his principal), particularly in cases where the market is tight and/or the agent is able to produce the buyer without a seperate buyer's agent. Of course, real estate agents won't generally volunteer this info....

Real estate lesson #1:

EVERYTHING is negotiable.

For a kickback, it's much easier for a buyer to get the kickback, especially if he/she has chosen the property already and just needs someone to hand-hold through the process.

If you have an easy-to-sell property (high demand area, many comparables), getting a kickback is possible. If you have a property that will actually require a lot of footwork from the agent (rural property, unique property, less-than-move-in condition, etc) it will be considerably tougher. In those cases, you may get what you pay for with a much lower commission.

While I believe the stats you quote on the average total commission being down to around 5% as well as the 2.5% that goes to the buyer's broker, I can assure you that the 50-50 split you mention between selling agent and thier firm is no longer the case. The market competition for agents, especially productive ones, has totally changed the compensation picture for real estate agents to the point where the really good ones end up paying only a monthly fixed "desk fee" and perhaps a small "administrative fee per transaction" to thier firms (Re/Max, for example), and they keep the rest (net of what goes to the buyer's agent). In fact, a brand-new real estate agent can negotiate a 70-30 split on thier very first sale, and not have to pay a desk fee in some cases.

Thanks for the insights. I'll be putting this knowledge to work again soon. Hopefully, the agents I approach with my wonderful ideas on how to cut their commissions won't physically attack me!

Looking at delta.com, under "earn miles" then under "finanical partners" here is what it says...again this is for delta...

https://www.delta.com/skymiles/getmiles/financial_partners/index.jsp

look towards the middle of the page till the bottom of the page....

just a rule of thumb....miles cost someone...u arent gonna get them for free....if I was buying something, especially as cash intensive as a house, I would tell the agent (or who ever is giving the miles) say whats these miles costing you...reply is X dollars...say keep ur miles, give me the cash.....thats me.....

just a rule of thumb....miles cost someone...u arent gonna get them for free....if I was buying something, especially as cash intensive as a house, I would tell the agent (or who ever is giving the miles) say whats these miles costing you...reply is X dollars...say keep ur miles, give me the cash.....thats me.....

Here's my question. If the agent you're working with is giving you miles, that means you've already been referred to him/her by a third party. (In which case, referal payments/agreements are already in place.) So asking to switch to cash at that point doesn't work.

So, you have to approach the agent before going through an intermediary, at which point they are paying nothing for the lead -- until you suggest it. They may go for some kind of discounted rate, but I don't think it's a straightforward or friendly discussion.

Do agents with the miles benefit charge higher commission rates to cover the cost of the miles? Meaning, do they press for a commission higher than 5%?

The Costco things seems to work this way:
Costco passes the lead off to a Broker that is part of their referall network>
Broker passes the lead off to one of his/her inexperienced &/or part time agents. You will never see the "producers" in this network, as they don't participate.

In my opinion what should be done is to figure out the cash value of a kick back or mileage bonus. Then approach a producer in your area for this same kind of compensation. This way you don't get an agent that sells homes for a hobby/side job - he/she truly know what their doing.

Ultimately you get what you pay for.

Do agents with the miles benefit charge higher commission rates to cover the cost of the miles? Meaning, do they press for a commission higher than 5%?

In selling a house recently, one broker (part of a large franchise) told me that 6% commission was not negotiable if the referral came through the airline's frequent flyer program. Otherwise they could go to 5%, although they squirmed about that later.

Real Estate commissions are negotiable. The Broker sets the schedule for his company. Some companies negotiate some don't. Some don't need to. The law in every state varies as to kick backs. Don't assume that it is legal. Referrals from mileage plans, Costco ecetera run around 35% of the side. You will rarely get a top agent when you are referred, as top agents are too busy to work for 2/3rds pay. The value you will get to yourself out of this 35% referral is rarely over 10% of the side. a 1% kickback on a 2.5% side is not reasonable and any agent that would work for what is a 40% referral is probably not experienced and has nothing better to do with their time.

You have to ask yourself what is more important a few thousand airmiles or an agent that can come up with strategies and strong negotiating skills. Then make the decision that is most appropriate. If you can find a Top Agnet and get airmiles/cash then you have hit a Home Run and congratulations, back patting and celebrating are in order.

From my recent experience, if I knew of a top agent that I really wanted to use and knew from acquaintances that the agent was not discounting commissions, I would consider asking a program I was interested in if that agent was part of the network the program uses. If so, I would ask them to refer me to him/her. At least the UA program representative was open about discussing which brokerages were part of their network and referred me a to specific agent that I requested. After meeting with the agent, I decided to use another agent (just personal preference). However, I believe for any referral bonus, the first contact with the agent/brokerage has to come through the program.

Speaking as a broker.... believe me, we negotiate commissions frequently enough! Often times warranted, sometimes not. But when it comes to points for loans (which I also do) I had to look into that deeper. Someone IS paying for those points and in the case of lending tree and the like it is the consumer. In a loan transaction there are a million places to 'bury' a fee and only the most savvy consumer would ever detect it. I was tempted to let them do my recent refi just for the points until I recognized the overall additional $4000 it was going to cost me besides being a .25% higher rate. Not worth it to me!

I did a refi more than 6 months ago and got 22500 nwa miles on a 180k refi
there did seem to be a fee charge fr there miles
i cant remember it offhand

miles posted 7 weeks after closing
(webiste said within 8 weeks)