What is a real estate commission rebate? A plain-English answer
When a home sells, a commission is paid to the brokerages involved. A commission rebate is when your own brokerage gives part of its share back to you.
Who pays the commission in the first place
In BC, the seller pays the whole commission out of the sale proceeds, and the listing brokerage shares part of it with the buyer's brokerage. In the US since August 2024, buyer agent pay is agreed in a written buyer agreement and is often paid by the seller as a concession in the offer.
Where the rebate comes from
From the buyer's brokerage's share. If that brokerage earns $12,000 on your purchase and has agreed to a 50% rebate, $6,000 goes to you.
Is it legal?
Across Canada, generally yes, with disclosure. In the US, it is legal in most states. A handful of states prohibit rebates, and we do not operate in those.
Is it the same as a discount brokerage?
No. A discount brokerage may cut service to lower its price. A rebate agent provides the normal full service and simply keeps less of the fee.
Is it free money?
It is your money, in a sense. The commission is built into the economics of every sale. A rebate means less of it goes to the agent.