How Do Home Builders Use Rebates?

January 14, 2020

How do home builders use rebates?

We talk a lot about rebates at HomeSphere because it’s part of our job to help simplify the rebate process between home builders and building product manufacturers. But we don’t always talk about how our builders use their rebates. So, we thought we’d ask them. That way, even builders who aren’t on our program understand the benefits.

But before we get ahead of ourselves, let’s talk about rebates in general, because some home builders aren’t even aware you can collect them. To those home builders: know that you can, and you should. Builders can earn rebates on a variety of building product categories from HVACs to doorknobs, and the earnings can be significant.

The rebate process

It’s true that the process itself isn’t always fun. Traditionally, builders manage their rebates individually or through HBAs, and it’s a lot to keep organized — which can make it feel like the returns aren’t worth it. That’s where a partner like HomeSphere comes in. We take care of the nitty gritty and oversight, while negotiating on a builder’s behalf for the rebates they’ll earn (from the size of the rebate to what products are eligible). And, we help you earn even more through our bundled approach that rewards builders the more they use products from our brand partners. 

It works like this: we don’t take a flat processing percentage from every individual rebate a builder claims. Instead, enabled by our technology, our rebate processing costs decrease as the number of eligible products a builder claims per closing increases. As a business partner, we share these efficiencies with you. And that means that even adding a small new product to your bundle can have a significant impact on your total earnings. (Curious about which brands we work with? Check our partner list!) 

We mention this not to stall from getting to our main point (we promise), but because this process allows our builder partners to earn $100 or more per home or unit. Which means we’ve got some builders cashing in sizable checks. 

So, how are they using these rebates? 

Put it back in the business

When builders consistently report their closings and products used to us, they can count rebates as a steady source of income. So, it’s not surprising that simply putting their rebate cash back in the business was an answer.

Our builders can elect to report monthly or quarterly, so it’s up to them — and the types of projects they work on — to determine how often they receive a check. Generally, quarterly checks include more closings and are larger, while monthly checks are advantageous for earning a little extra income every month. 

Not yet a HomeSphere builder?

HomeSphere is a free rebate program offering cash back on over 1,500 products from more than 80 of the top building product manufacturing brands.

Save for a rainy day 

Another smart way our builders use their rebates is to pass the checks into a savings bucket for use on unforeseen business costs.

The consistent checks (if builders are reporting regularly) are an easy way to pad a savings account and grow rainy day funds. And it can be particularly useful when the market shifts and construction slows down — as we saw at the end of 2018.

Offset the cost of more expensive products

Sometimes more expensive products aren’t a priority for home builders, but they can be a big draw for homebuyers. One of our builders reported using their rebate earnings to offset the cost of such items, and we think that’s a great idea.

It allows flexibility in product choice and gives the homebuyer the luxury they want but typically don’t want to pay too much for.

Bonus: Donate to charity

One of the most altruistic uses we’ve heard is from our builder partner, ESI Construction, who donates their rebate earnings to local charities. We’re impressed with their selflessness and dedication to the local communities they build in! Their ESI C.A.R.E.S. Foundation has supported the Ronald McDonald House in Idaho, and they’ve made 147 donations since they were founded in 2018. 

But it’s not just about the rebate…

In our world, the rebate is just an opening to create closer relationships between home builders and building product manufacturers. As you earn rebates, you should also take the time to get to know your local brand reps. They’ll help you stay current on product trends, provide access to their own construction network and help you gain quality bids for your projects. 

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