Buyer rebates allow agents to share their commission with buyers. This can be used to reduce closing costs, lower the purchase price effectively, or provide a closing credit. Some states restrict or prohibit rebates, and some lenders may not allow them.
A buyer's agent earns a 2.5% commission on a $400,000 home ($10,000). The agent offers a 20% rebate, returning $2,000 to the buyer at closing as a credit toward closing costs.
Buyer rebates are legal in most states but NOT all — some states prohibit them. Know that the rebate must be disclosed to all parties and reflected on the closing statement. Lenders must also approve the credit.
Related Terms
Related Concepts
The fiduciary obligations a buyer's agent owes to their client, including loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.
A form that explains to the buyer the types of agency relationships available and the duties associated with each, required to be provided before substantive discussions begin.
The practice of a listing broker sharing commission with a buyer's broker, historically offered through the MLS but now prohibited from MLS display under the 2024 NAR settlement.
An initial meeting between a buyer and agent to discuss the buyer's needs, explain agency relationships, review representation agreements, and establish expectations for the home-buying process.
The duty of a buyer's agent to act solely in the buyer's best interest, avoiding any conflicts of interest and putting the buyer's needs above the agent's own financial interests.
Frequently Asked Questions
Study This in Your State
Buyer Rebate may have state-specific rules. Choose your state to study Buyer Representation with localized content: