Blocks & Lots

Real Estate Commission Rebates: How They Work

In the US, for better or worse, real estate commissions are negotiated between the listing agent and the seller. You, the buyer, have no say in the commission paid.

As a result, some brokers that are will to work for lower commissions, offer ‘commission rebates’.

Commission Rates

Commissions in the US have hovered around 6% in total, with 3% going to the listing agent and 3% going to the buyer’s agent.

For sure, commissions have come down a bit and in some cases, the commission can be 5.5%, 5%, or on the high-end of real estate deals even lower.

When a buyer’s agent rebates their commission to you, they are giving you a portion of what the listing agent is sharing with them. This is a ‘work-around’ to the way commissions are established in the USA.

How Commission Rebates Work

Simply put, a commission rebate is cash to you at the closing table.

The chart below shows how a commission rebate pencils out on a $1,000,000 deal.

If a commissions rebate is on your must-have list, you can interview agents at any firm, large or small, well-known or not, and see if you can negotiate a commission rebate. If you are on the higher end of the market, your chances of finding an agent willing to play ball, are pretty high.

There are, however, a number of real estate brokerages in NYC that offer commission rebates as standard practice. Two of the better-known ones are Yoreevo and Prevu.

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Top photo courtesy of Madison House.