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2017-03-11 08:29:42
US 'Military on the Move' FAQs

 

Question 1: What happens when a buyer or seller who is already working with one of our agents hears about the program? Answer 1: In order to participate, military consumers must register prior to making contact with a real estate agent or must disclose at the beginning of the relationship with the agent that they are interested in this program, and a military ID must be presented to validate eligibility as either active duty, retired (20 years of service) personnel or wounded warrior.

 

Question 2: What is the fee if a military consumer is interested in a market where there is no MOM broker? Answer 2: Leading RE will refer the business to a network broker at a 30% referral fee, out of which the destination broker will fund the rebate to the consumer and send the remaining 10% to LeadingRE. Example: LeadingRE (origin broker) refers a Military Consumer to a non-MOM Broker; the referred customer purchases a $500,000 home.
 Function side commission is $15,000
 Destination broker owes $4,500 referral fee*
 Destination broker pays $3,000 rebate (20% of function side commission) to Military Consumer at closing, and pays $1,500 (balance of 30% referral fee) to origin broker

Question 3: When I refer a military consumer to another broker, who pays the rebate? Answer 3: The rebate is always due at closing, so the destination broker will fund the rebate, then complete a transmittal form to the origin broker indicating function side commission, gross referral fee (30%) and rebate paid (20%). The net amount due the origin broker is the difference between the gross referral fee and rebate paid, or 10% of the function side commission. Example: MOM participating origin broker refers a military consumer; the referred customer purchases $500,000 home.
 Function side commission is $15,000
 Destination broker owes $4,500 referral fee to origin broker
 Destination broker pays $3,000 rebate (20% of function side commission) to military consumer at closing, and $1,500 to origin broker
 Typical network fee (20% of $4,500 = $900) is waived

Question 4: Can I expand program eligibility in my own market? Answer 4:Yes, some brokers may wish to expand eligibility to honorably discharged, family members, survivors, etc. However, if you refer a customer to another broker under such expanded guidelines, the referral is not eligible for the network fee waiver; i.e., the network fee is still due. Example: Participating origin broker refers a military consumer who is honorably discharged (i.e., outside MOM program eligibility); the referred customer purchases a $500,000 home.
 Function side commission is $15,000
 Destination broker owes $4,500 referral fee to origin broker
 Destination broker funds $3,000 rebate (20% of function side commission) to military consumer at closing and pays $1,500 (balance of 30% referral fee) to origin broker, out of which the network fee (20% of $4500 = $900) is due to LeadingRE. Note: Deciding to expand the eligibility parameters at the local level is the local member’s decision, but it may not be advisable to do so initially in order to limit the pool of consumers whose business may be unnecessarily discounted. Exceptions could still be handled on a case-by- case basis if warranted. As members develop experience with the program, the decision can always be made to expand parameters.

Question 5: Several states have strict rebate/credit rules requiring everyone involved in the real estate transaction to agree to the rebate. So what happens if the client waits until the closing to ask for the rebate/credit?Answer 5: This is why there is very explicit language on the main landing page that to be eligible to participate, a military consumer has to register prior to when they begin working with an agent. That way, all parties are fully aware before they move forward. In the event, the military consumer doesn’t register or discuss this with the agent prior to working with them – but it instead comes up ‘after the fact’ as closing nears…that’s when we say the agent needs to bring her management team in (and if it’s a referral, the destination needs to immediately reach out to the origin team) and all the parties involved need to decide if they want to honor the rebate/credit, if it’s legal to do so, and/or if they’re going to decline the client’s request because they didn’t pre-register. If a LeadingRE broker is concerned about their ability to fulfill a rebate or credit per their state regulations, we highly recommend they review this with their broker and/or legal counsel prior to registering for the program.

Question 6: The main page of the MOM website educates military consumers that they must register for the program to be eligible (ie. They can’t start working with a broker or agent and then request the rebate). The registration process will work as follows: Answer 6: The military consumer will be asked to select a Base or Area of Interest. On the base landing page, they’ll have the opportunity to review all MOM member business cards (profiles), and will have the option to send their registration inquiry to one or multiple brokerages (if we have multiple MOM members registered for that base). A carbon copy of this registration inquiry will go to MilitaryOnMove@LeadingRE.com so we can ensure they’re being routed properly.

Question 7: If a member receives an inquiry from a MOM prospective client which comes directly to our corporate website asking for either buying or listing assistance in our service area, and we are a MOM participant, how would we would fund the rebate to the customer at settlement? Since we didn’t receive the referral from a LeadingRE broker or LeadingRE would be get credit for the closed referral? Answer 7: You would either fund the rebate crediting the 20% to the customer on the settlement sheet or, if a listing, by choosing to revise the function-side commission at inception. Since you didn’t receive the referral from LeadingRE or a LeadingRE broker you wouldn’t receive any credit for a closed referral.

Question 8: If we receive a MOM referral via our corporate website and want to place with a LeadingRE Broker in a state which forbids rebates, what’s the alternative? Would the destination Broker need to reduce the listing commission percentage on the function side, if a seller. If a buyer, however, would we have to step back from placing the referral under the MOM rebate guidelines? Answer 8: The website will have multiple messages stating the benefit is available “in states where allowed by law.” If it’s illegal to fund a rebate, that’s the state’s choice, not the broker’s, and the referring broker, in this case, Patterson Schwartz, just has to let the Military Consumer know that. The commission reduction is not always an option. All participating brokers must be prepared to break that news to the consumer.

Question 9: When talking to our lender and attorney about the MOM program, it was brought up that it may be difficult to pay a buyer. The attorney says it has to be on the HUD, and the lender says they can't have it on the HUD. Has anyone come up with a buyer solution to that? How do we 'rebate' the buyer and still be within lender guidelines? Answer 9: In states where rebates are allowed by law, the rebate must be disclosed to all parties, including the lender. The Program Manual includes a “rebate disclosure form” and also includes language for the HUD-1. If the Military Consumer hasn’t applied for a loan prior to joining the program, he/she should discuss it with the loan officer at the time of application and indicate that the rebate will be included on the HUD-1. If the lender won’t allow a rebate, the Military Consumer has a choice to find another lender or waive the rebate. It’s my understanding that failure to disclose a rebate is a RESPA violation; lenders should know that.

Question 10: We are seeing an increase in agents calling us…working with current USAA and NFCU wondering what they can do to earn the business. We are teaching about the MOM program. Do you have a script or information our agent can use to help the NFCU/USAA buyer-seller opt out of the CARTUS program? Or any other affinity program, for that matter?Answer 10: We really cannot advise you or your agents to try to convert Cartus USAA/NFCU business into MOM business…the same way we wouldn’t want Cartus to swoop in and steal a MOM client. I think this is more about educating agents that this new program exists so they can let their clients know. That way, even if the consumer is going through Cartus now, perhaps they’ll consider MOM for their next purchase or sale to take advantage of a potentially higher rebate/credit and the expedited receipt at the closing table.

Question 11: If a MOM member sends a referral to a member in a no-rebate state, we are thinking this will be handled as a regular LeadingRE referral with no waiver (i.e., 30 percent, with 24% to referring broker and 6% to LeadingRE). Someone asked, though, if the referring member – who is in a rebate state – could pay the client out of their referral fee? If so, then the 30% would go to them but they’d pay the client 20% and keep 10% with nothing to LeadingRE. Is this acceptable or if it would still be illegal since the property is in a no-rebate state? Answer 11: No other entity even in another state can provide the payment to the non rebate or cash back states.

Question 12: In no-rebate states, could the member reduce the commission by that amount instead, or would that still be considered a violation?Answer 12: There is not really any way using commission to provide a benefit to a buyer but an agent could possibly reduce a commission for a listing to a “preferred rate” We just couldn’t state what the commission would be since this involves multiple companies. In the event no member is registered for the base, the consumer registration will route to MilitaryOnMove@LeadingRE.com and the Chicago team will place it through Xchange as a referral to a member covering the area for a 30% referral fee, 20% of which will be funded to the qualified military consumer upon closing.

Question 13: At what point does the buyer/seller have to be active duty?  At beginning of relationship or at closing? We have military members who are currently active duty, but at some point may leave the armed forces, not retire.  When they start working with our agent they are eligible but may not be at the time of closing. Answer 13: The military consumer would have to eligible for the program throughout the entire transaction, from the beginning of the relationship all the way to closing.  Of course, as with other local offerings, if William E Wood decided to expand MOM program coverage in certain cases, that is your prerogative. But any outbound referrals would be subject to the program rules, and if a military consumer left the military without retiring after you had referred them to another MOM broker, both the origin and destination agents would have to agree to the rebate structure before closing.  This is similar to a situation where a broker who offers MOM rebates to military dependents, which is beyond the scope of the MOM program, would have to negotiate a rebate funding structure with the destination agent at William W Wood before referring their client to you. So if the consumer was eligible at the beginning of the program but not at closing, you would have to inform them that the rebate was no longer available.  If it is local business William E Wood could also decide to fund the rebate on a case by case basis. 

Question 14: Are Reservists eligible for the program? Answer 14: If a Reservist is deployed, then they are active duty and eligible for the MOM program. However, if they are currently just a weekend Reservist they are not deployed, not active duty, and not eligible for the program. With this restriction on the national program as with all restrictions local members are free to expand the program offerings locally to include other groups.

Question 15: Should I join up with MOM even if there is no base nearby?Answer 15: Yes! Veterans live everywhere and offering the rebate is a fantastic opportunity for your agents to attract military consumers and say “thanks” for your service. There may be a VA Hospital or military retirement area near your company; or, failing that, you may see a MOM client move into your area after their service ends. If you close even one MOM referral from a network member or LeadingRE, you will make up all or almost all of your yearly fee in just the additional commission you receive by having your network fee waived.

 
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