A famous song going something like this: War is good for, absolutely nothing!

The short answer for this question is also absolutely nothing! Thanks to droves of Realtor home market is functioning well in San Jose Area.

In any functioning market chances that you are be able to find purchase a product at lower price by low balling the price is close to zero. Other buyers will make sure that you will never be able to get the product at discounted price.

Home market in no exception. If you want to purchase by low balling the home prices, you can move to places like Detroit and successfully low ball the prices and get away with it. Here in San Jose Area that tactic will never work. You have to actually bid above asking price if you want to be able to purchase bargain homes.

Please go to my website to get more information about buying and selling homes in San Jose Area.

I had and have many buyers looking to purchase REO Homes in San Jose. These buyers want to take advantage of my offer to share my commission with them.

The problem is that it is too difficult to purchase REO Homes in San Jose Area. Most of these homes will be so much in high demand that I have to write 10-15 offers before one is accepted.

I had tens of buyers who gave up after writing three or more offers each and went back to their rentals. These people have high income and easily could afford the homes they were biding on. I know for fact that these buyers did not purchase with any other Realtors as they see $5000 to $20,000 Commission rebate they receive from my on great value.

Also smarter buyers see 5 to 10 properties a day and put 3 or more offers each time to increase their chances to purchase one of these REOs. This in turn will cause problem for the bank that will have buyers who will not go through the purchase.

I always tell people who interview agents for listing their home to ask a simple question from the listing agent to weed out dishonest agents. The question is how many percent of the homes is sold by the listing agent's firm and how many percent is sold by cooperating broker?

If the listing agent sell more than 10-20% of his/her listings themselves, you have to avoid that listing agent. Still some of assets manger and banks are not smart enough to weed out these agents. What is the difference for the Bank, you might ask?

I had recently a listing in San Jose area, the previous listing agents tried to force the owner to sell at $760,000 to her own buyer, while cooperating broker came with much stronger offer at much higher price. Then the previous listing agent was fired through her broker, afraid of DRE to get involved and the owner list the property with I.

Most assets manager do not care about these practice of packet listings and the REO listing agents are doing a good job to hide information about asset managers, so nobody can send the a request for investigation.

About a year ago I sent a very strong offer to a broker for $320,000 for a distressed property. A few days later the property was sold for $260,000. He made some excuses that it was asset manager that made a mistake I am very busy and do not have time to investigate the issue.

Last week I submitted another very strong offer to the same broker. He has came up with some excuses that my the offer I send was rejected by assets manger because of scan quality. At the end I was too tired to bickering and delivered the original offer printed with laser printer on high quality paper to personally to his office. We went through the contact in his office and everything was there.

Now I got an email from his office that some pages all missing. During this time he continue to submit offers and show the property.

I have a personality who believe in goodness of people, buy the buyer told me yesterday when I visit him, that this guy is playing game.

What is the solution to this mess? One thing that banks and assets manager can do to distribute the REOs through an automated system and offer them to all brokers. Each broker should be allowed only one listing and until it is sold he is not allowed to get another one.

This way the Brokers will have an intensive to cooperate to other brokers to sell the REOs instead of playing games. With current technology managing many offers from many Broker should not be a problem and the system will clean itself like some of the modern kitchen appliances

Confusion about Commission Rebate in Bay Area

Recently I had a conversation with a client in Bay Area wanted to get Commission Rebate and at the same time be presented by his friend as agent.

I know that it is hard for Real Estate Agents to give away their hard earned commission to clients, but sending the client to another Real Estate Agent to collect the commission rebate is not a fair thing to do

It is obvious that the commission rebate is connected to agent, not to the property, 99% of the agents refusing to share their with clients, so it is obvious the 1% who do get more business, more work for less money

Another issue is I sometimes send twits about other agents listings. I am surprised to see some of the because furious and want me to delete the twit. I do not understand their point of view. It does not cost them anything extra and the chances the property get sold increases dramatically. Isn't it the point to hire us to sell the property as cooperating agent?

I would appreciate if any agent explain the point of view of these agents to me. I do not get it!!!!!

First of all I am not a CPA and I advice everybody to investigate what I am going to say here.

This is no legal or tax advice. I am a real estate broker and as such I can not give legal or tax advice

How much tax should I pay when I receive a Cask Back from a Broker or Real Estate Agent?

This question is normally asked by buyers who are about to get a cash back in escrow.

The answer is zero percent, but you can do it two ways. The hard way and the easy way.

Let's start with the easy way.

The easy way is to make your agent write it on the offer or purchase contract something in this formate:

Buyers will get $15,000 dollar cash back within the escrow.

The money you will get from your agent will be used to pay your closing costs and reduction of the purchase price.

Because you will not get paid outside the escrow, you will not get a 1099. If you do not get a 1099 then you most probably do not have to explain anything to IRS about this money. Everything is crystal clear. You get a price reduction from the seller in form of Commission Rebate from your agent. Seller paid a commission to your broker, thus his profit from the sale is decreased. You got this commission money from your Real Estate Broker, but this money is spend to get a better price for the house.

The hard way to do the same thing is to force your broker to pay you outside the escrow. Suddenly everybody have to explain themselves to IRS.

Title company issued a check to your broker for full amount and when the broker issue a check to you as cost of sale it might raise some questions with IRS.

Also you as buyer will get a 1099 and have to ask your CPA to explain to IRS that this money is really a reduction of sale price and not an income.

So let's keep things simple. Let's keep all the Cash Back, Commission Rebates or Buyers rebate within the escrow, to make life easier for everybody

Broker of American Dream Realty

HR Dadgar