The Dallas Condo Loft

Many of you have asked us in the past:

“So when I get my commission refund in form of a check after the closing, am I taxed on this as income?”

The Answer: No, you are not.  Commission refunds given from CondoDomain.com to you are not considered taxable income.

While we are pretty good at math and very good at giving our customers back big checks at closing…we are not accountants and don’t mean to give any tax advise.  Please read below on a favorable ruling from the IRS in which Redfin (one of our fav’s) got in their request.

IRS Rules That Redfin Does Not Have to Report
Commission Refunds as Taxable Income

SEATTLE - March 7, 2007: Online real estate broker Redfin Corporation today announced a ruling from the U.S. Internal Revenue Service that Redfin does not have to issue Form 1099 to customers that receive commission refunds because such amounts generally are not taxable as income. Redfin is notifying all of its home-buying customers by mail that the company will not report their commission refunds to the IRS.

Redfin Direct combines an e-commerce application with the services of a local, experienced Redfin agent who handles home tours, pricing advice, offer presentation, negotiations, inspections and the closing process. Home-buyers who can find a home to buy on their own get two-thirds of Redfin’s commission refunded at closing.

Across Washington and California, Redfin’s average commission refund is more than $10,000. Redfin customers typically apply their refund to closing costs, which include loan fees, local property taxes and escrow-related costs as well as an initial mortgage payment. As the commission refund usually exceeds closing costs by thousands of dollars, Redfin often issues its customers a check for the excess.

Prior to Redfin Direct, commission refunds in excess of closing costs were relatively rare, and no ruling existed as to whether such amounts were required to be reported on Form 1099. Accordingly, Redfin petitioned the IRS in November 2006 for a ruling, which Redfin received from the IRS last week.

Because an individual or corporation can only petition the IRS on its own behalf, Redfin could only seek a ruling to clarify its own reporting obligation, not to address the individual circumstance of each customer’s tax return. The ruling does however state that “a payment or credit at closing from [Redfin] represents an adjustment to the purchase price of the home and generally is not includible in a purchaser’s gross income.’

In support of its ruling, the IRS cites guidance addressing a non-profit’s down-payment assistance to low-income families buying houses or a manufacturer’s rebate on a car, neither of which are taxable. The full text of the ruling is available on Redfin’s blog.

“Seeking a ruling from the IRS is not an insignificant undertaking,” said Redfin VP of Real Estate Operations David Wilner. “Rather than having hundreds of customers make inquiries with the IRS on a case-by-case basis, we felt it was the right thing to do as part of our commitment to supporting customers through every phase of the home-buying process from offer to close and beyond.”

CondoDomain.com takes second place in the 2008 Real Estate Pacesetters contest which ran last week highlighting the best of the best in real estate and technology, web 2.0 and innovative real estate companies.  See the results here

Obeo took the gold in first place.

CondoDomain.com took silver

Roost.com took the bronze

Thank you all for you support and your votes.  This was a fun event and we were estatic to just make it to the final…forget about winning a silver medal!  See you guys all next year….and Stearns…your going down! 

CondoDomain.com appoints Director of Real Estate in efforts to expand their new web-based buyers brokerage real estate model nationwide into its 33 pre-existing markets. Now operating in Boston (since January ‘08) CondoDomain.com is now ready to expand into its 3 year old network across the U.S.

Brian-Logan (”B-L”) will lead these efforts as the Director of Real Estate. He will oversee the initiation and launch of satellite offices across the country for CondoDomain.com. Working alongside CEO Tony Longo, B-L is responsible for recruiting and managing all new brokers nationwide as well as advising on the strategic, long-term business model of CondoDomain.

Prior to joining CondoDomain, Brian-Logan worked in the resort destination of Nantucket as a real estate broker, coordinating high end sales and luxury rentals.

B-L received his diploma from The Loomis Chaffee School and his Bachelor’s degree in Psychology from Middlebury College. He was a member of the two-time national championship lacrosse teams in 2001 and 2000 while simultaneously running a moving and storage company for three years. B-L’s business acumen in addition to his broad range of skill sets makes him an invaluable member of the CondoDomain corporate team.

B-L - WELCOME TO THE TEAM….WE ARE ESTATIC THAT YOU ARE HERE!!!

Check on Brian on CondoDomain | Facebook | LinkedIn

We are calling all Dallas condo developers and marketing firms to send in their Dallas condo development information to us.  As you know we are planning on launching CondoDomain Dallas very shortly.  With the site almost complete, the Dallas MLS almost implemented, and content published, we are so excited to kick off our 2nd city.

CondoDomain Dallas has been opened for just under 2 years, however, it was an ‘ad based’ portal marketing solely new construction developments in Dallas, TX.  Now CondoDomain.com is a web-based buyers brokerage, still concentrating on urban new development, but is working with buyers to help them find their new home, whether new construction, luxury building, loft, MLS listing, FSBO, or even Foreclosure.

We will be concentrating on helping buyers find their new condo in the downtown Dallas neighborhoods including:  Turtle Creek, Victory Park, Downtown, Uptown-Intown, Highland Park, North Dallas & Las Colinas.

Bookmark CondoDomain Dallas and make sure to register here so you are first alerted when we launch this new web-based brokerage concept!

Check out this article released by the Associated Press regarding negotiating a real estate commission from traditional full-service real estate companies. Now most of this article really compares the “Sell Side” of the business and not the “Buy Side” where many innovative companies have really come in to shake up the industry such as - umm Zip Realty, Redfin, Iggy’s House, BlueRoof & umm us (CondoDomain.com).

Don’t be shy about haggling over what you pay your real estate agent. A study released Monday by Consumer Reports found 71 percent of sellers who negotiated for lower commissions with their brokers were successful. But only 46 percent of sellers surveyed tried.Those who paid commissions of 3 percent were just as satisfied with their broker’s performance as those who paid 6 percent, the study found.

The lesson? Haggling won’t hurt.

In fact, those who paid higher commissions were more likely to have regrets about the selling experience. Nearly one-third of them said they should have been more aggressive in negotiating a fee.

Sellers were most likely to get lower fees from independent and RE/MAX brokers, said Mark Kotkin, director of survey research at Consumer Reports.

“But they will all negotiate. Just ask for it,” he said. “It’s like buying a car. A lot of people think (the price) is set, but it’s not.”

Independent brokers may be more likely to negotiate fees since they keep their entire commission, while those who work for other brokers typically split commissions with the broker in exchange for marketing and office support.

About half the home sellers surveyed paid less than 6 percent in commission. The study is being published in Consumer Reports’ September issue. The issue also includes tips on which home improvements provide the biggest pay off.

Continued…