As the real estate industry prepares for major changes, Howard Hanna Real Estate Services is aiming to top its competitors with the announcement of a cash-back program for homebuyers.
Homebuyers can receive a credit of up to $10,000 back in closing cost savings if they sign an exclusive contract with a Howard Hanna buyers agent and obtain a mortgage through Howard Hanna Mortgage Services.
The O’Hara-based company calls it the Buy & Borrow Bundle Program. The closing cost credit amounts to 0.05% of the mortgage amount, which means the mortgage would need to be $2 million in order to qualify for the $10,000 maximum credit.
“If they buy a house for $400,000, they save $2,000,” said Dennis Cestra, president of Howard Hanna’s Pennsylvania market. “This will enhance people’s buying power. Maybe now they can get the new kitchen countertops they want. Who knows what the money can be used for.”
Real estate brokers nationwide are preparing for new rules set by the National Association of Realtors that go into effect starting Aug. 17.
Home sellers will no longer be responsible for paying a sales commission to the listing agent and the buying agent. Going forward, home buyers will pay the buyers agent either a negotiated commission or fee for their services.
Most buyers agents will require buyers to sign exclusive contracts with compensation requirements before showing homebuyers any properties.
John Petrack, executive vice president of the Realtor’s Association of Metropolitan Pittsburgh, said Howard Hanna is the first to roll out a marketing strategy to attract homebuyers, but he anticipates more brokers will be competing for home buyers’ attention.
“It’s a very competitive business and I imagine that we’ll see a variety of programs or business models launched in a short time frame,” Mr. Petrack said.
He added that, while the settlement reached by the National Association of Realtors makes it clear that buyers and sellers can negotiate the commissions they pay to real estate agents, that is not a new system.
“All of these options have always been available and still are,” Mr. Petrack said. “The only difference is that a buyer may have to compensate their agent directly.
“As they usually do in commercial transactions, sellers still have the option of offering buyer agent compensation,” he said.
Howard Hanna, the largest real estate broker in the Pittsburgh region, as well as most other real estate brokers in the state, use a buyers agent contract written by the Pennsylvania Association of Realtors, although brokers are free to create their own contracts.
The Consumer Federation of America has described Pennsylvania’s model contract as “not the worst, but still not great,” due to clauses in the contract that give homebuyers no ability to sue a real estate agent and buyers not being able to get out of the agreements if they want to.
Mr. Cestra said the Buy & Borrow Bundle Program is an outgrowth of the company’s mission statement as a family-owned, full-service real estate company.
“It’s a serious and important endeavor for us to take as a family and as a company to provide this support to our customer,” he said. “This is helping to create that platform for one-stop shopping.
“We think this is going to advance us as a company and really as an industry in general,” Mr. Cestra said. “We like to lead the way in those type of things.”
Tim Grant: tgrant@post-gazette.com or 412-779-5834.
First Published: July 24, 2024, 9:30 a.m.
