Buyer Rebate
Definition
A portion of the buyer agent's commission returned to the buyer at closing, legal in most states as a way to reduce the buyer's closing costs.
Example
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.
Exam Tip
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 Buyer Rep Terms
Buyer Broker Duties
The fiduciary obligations a buyer's agent owes to their client, including loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.
Buyer Representation Disclosure
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.
Cooperative Compensation
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.
Buyer Consultation
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.
Buyer Loyalty Obligation
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.
Termination of Buyer Agency Agreement
The legal ending of a buyer representation agreement, which can occur through expiration, mutual consent, breach, or specific termination provisions outlined in the contract.
Frequently Asked Questions
Test Your Buyer Rep Knowledge
Practice with exam-style questions to make sure you can apply Buyer Rebate and other buyer rep concepts.