The payment of the Ribbon fee is written into the purchase contract through our Ribbon Offer Addendum and the funds are allocated to Ribbon at closing. The Ribbon fee is included into the buyer's earnest money deposit (and/or due diligence deposit in North Carolina) when submitting the offer but it can also be allocated from seller paid closing costs and agent commissions. Instead of deducting the buyer's deposits from the purchase price at closing, Ribbon will just absorb some of the deposits on the final closing statement to pay for the fee.
As a reminder, the RibbonCash Offer is a standard offer to purchase, marked as cash, with an addendum that states that if the buyer cannot close then Ribbon will buy the home. If the buyer can close with their own financing, the fee allocated to Ribbon is only 1%, however since there is the possibility that Ribbon buys the home, the full Ribbon Reserve fee must be included in the deposits.
See below for an example of a $300,000 purchase with a 2.0% fee. (Our fee is 2.0% in NC, SC, TX, & AL, 2.4% in GA and TN, and 2.75% in FL. See our pricing page for more details.)
Initial Contract
- Purchase price: $300,000
- Earnest Money: $6,000 (Deposits must equal a minimum of 2% to cover the Ribbon Fee. Deposits go into escrow like a typical transaction.)
- Seller paid closing costs: $0
On closing day there are two potential outcomes:
1. Ribbon Reserve: Ribbon buys the house and leases back to your client
- Ribbon collects 2.0% fee from buyer's earnest money credit at closing
- We lease back for up to 6 months— rent is prorated to the day
- When your client is ready to buy back from Ribbon, the contract will read:
- Purchase price: $300,000
- Earnest Money: $0
- Seller paid closing costs: $0
2. Ribbon Boost: The buyer purchases without needing Ribbon's cash to fund
- The 2.0% is a buyer credit at closing
- 1.0% is directed to Ribbon and is reflected on the settlement statement
- 1.0% going towards buyer's closing
