FAQS About Real Estate Rebates

Q?Is it legal for agents to give commission rebates? Is it legal to receive them?

The answer is yes, in most states it is legal for agents to give and clients to receive real estate rebates.  The home page of this website has details on which states do and don’t allow rebates.  You can read more information about this at this link and this link on the Department of Justice’s website.

Q?Is the rebate I receive taxable income, do I get a 1099 for the funds I receive?

No, according to the IRS a real estate rebate is not taxable.  You can read more about the IRS position on the matter at this link and this link.  Since the rebate is not taxable, a 1099 will not be issued to you.

Q?How much will my rebate be?

That depends on how much the commission paid to your agent is. Real estate commissions are not fixed and can vary in every transaction. However, we will give you a sample transaction and calculate the commission rebate you would receive under this scenario:

  • Purchase Price of $425,000
  • Real Estate Agent Comission of 3% = $12,750
  • 20% Commission Rebate = $2,550
Q?Do I have to sign a contract with the agent that is assigned to me?

If you are selling a home you will need to enter in to a listing agreement with the assigned agent. If you are buying a home the agent may or may not request a Buyer’s Agent Agreement. In either case please make sure you understand the terms of the agreement and the time frame of the agreement and make sure they are acceptable to you. If they are not you can ask the agent to amend their terms, or choose not to have them represent you in which case you will not receive the rebate.

Q?What if I don’t like the agent that is assigned to me?

We get it, sometimes people just don’t “click” with the agent, and many times the agent’s feeling is mutual.  If this is the case you can contact us and request a different agent, however, depending on where you are in the process this may or may not be possible.  If you already have a home under contract with your assigned buyer’s agent it is too far in to the process to change.  Likewise, if you have a signed listing or buyer agent agreement you may have to wait until the agreement expires before requesting a new agent.

Q?Can I use the Commission Rebate towards my closing costs?

Although this may be possible in some circumstances, we generally don’t allow it as part of our service.  Many times lenders will not allow the commission rebate to be used towards closing costs. Also, in order to ensure you receive the correct rebate we need to process the transaction though our office.

Q?What if I already have a Real Estate Agent?

If you already have an agent and have signed a listing agreement or purchase contract then you are too far in to the process in order to use our service.  In order for our service to work within the legal guidelines of the industry we must place you with an agent who assists you through the entire process of buying or selling a home.