When you buy a home, you might get a chance to save money at closing through a home buyer rebate. With U.S. home prices still near record highs and 30-year mortgage rates hovering in the high-6% range, every bit of savings matters.
A home buyer rebate is money your agent gives back to you from their real estate commission. Stephen Brobeck, a senior fellow at the Consumer Federation of America, notes that these rebates can be substantial.
“Rebates typically amount to several thousand dollars, so it is worthwhile for buyers to make the request,” says Brobeck.
Not all buyers are eligible. Many agents refuse to offer rebates because it cuts into their pay, and nine states ban them outright.
Getting a home buyer rebate is often easier than you think. With Clever Real Estate, you’ll get matched with top local buyer’s agents from major brokerages so you can choose the one that fits your needs best. When you close, eligible buyers can also get up to $500 cash back if you buy and sell with a Clever agent. It’s a simple way to save money without sacrificing full-service support. Just fill out this short quiz to get connected to local experts today!
How to get a home buyer rebate
Companies that offer home buyer rebates
Many brokerages and real estate services offer built-in rebates and cash back for home buyers. However, not all programs are created equal: some brands offer higher buyer savings, but with service tradeoffs. Others don't guarantee the full amount, or are available only in a handful of markets.
Remember that your rebate may differ based on specific transaction details, market conditions, the home's price, and the commission structure.
| Company | Details | Eligibility |
|---|---|---|
| Clever | Up to $500 back when using Clever to both sell and buy. | Must use Clever agents; cash back varies. |
| Prevu | 2% commission rebate on homes near or over $1 million. | Available in 12 states and D.C. |
| Redfin | 0.25% refund of purchase price. | You must work with a Redfin agent before the second tour of a home; offered in 50+ markets. |
| Trelora | Offers up to 50% of the agent's commission ($6,000 cap). | Available in 12 states. |
| SimpleShowing | 1% refund (up to 50% of the agent’s commission.) | May be subject to commission minimum. |
| Homie | Offers up to half the buyer’s agent fee. | You must use Homie's in-house services to qualify. |
| UpNest | Rebates not guaranteed, depend on the agent used. | Discuss with the agent to determine eligibility. |
🏆 Our pick: Clever Real Estate
Clever Real Estate is a service that connects you with the best local agents for free. If you buy a home with a Clever agent, you may qualify for Clever Cash Back after closing on eligible homes over $150,000.
Cash back rebates are generally better than commission rebates because they free you to spend money on whatever you want. For example, Clever offers rebates of up to $500 when you use a Clever agent to both sell and buy a house.
» Match with a top local Clever agent, get Clever Cash Back
🥈 Honorable mention: Prevu
Home buyers searching for a luxury home may find a Prevu agent to be a good fit. The company offers a 2% commission rebate on homes that sell for close to $1 million or more. Buyers shopping for a less-expensive home typically get a significantly smaller rebate—if they qualify for one.
Other home rebate options
Redfin
Redfin’s rebate program, Redfin Sign & Save, offers homebuyers a 0.25% refund of the purchase price. For instance, a buyer purchasing a $500,000 home would save $1,250. To qualify, buyers must sign an exclusive Buyer Agency Agreement with Redfin before their second home tour and close on a home within 180 days of signing. The program is now available in over 50 markets nationwide.
One caveat: unlike Clever, you'll work with a Redfin agent instead of a traditional real estate agent. Redfin agents often juggle a lot of clients at the same time, so you may not receive the same level of attention that you would from a traditional realtor. Working with Clever gives you a full-service, local, and personalized agent. View our analysis of Clever vs. Redfin.
Trelora
If your budget is under $350,000, you could earn up to half your agent’s commission by working with a Trelora agent. However, the company caps buyer rebates at $6,000, which means you can likely get more from other companies if you have a higher-priced home.
SimpleShowing
SimpleShowing offers up to 50% of an agent’s commission fee, but buyers can only qualify for a full rebate if they tour five or fewer homes before purchasing one. Once a buyer has toured six homes, the rebate begins to shrink, and it gets smaller the more homes you tour. (Note: A recent NAR survey found the typical buyer tours nine homes.)[4]
Homie
Homie's "50/50" program offers a competitive edge in markets where cash offers are prevalent. This program allows you to borrow funds for all-cash home offers, increasing your buying power. Additionally, you can earn a commission rebate of up to 50% of the buyer's agent fee.
Buyers must use Homie's in-house services, including Homie Loans, Homie Title, and Homie Insurance, to qualify for the full rebate.
Homie requires buyers who want a rebate to use the company’s in-house mortgage and title services, which are often more expensive than options elsewhere.
UpNest
Like Clever, UpNest connects you with local real estate agents at no cost. However, unlike Clever, UpNest doesn't require its agents to provide buyer rebates. You might need to speak with several agents to find one willing to give back a portion of their commission as a rebate. We've compared UpNest vs. Clever to give you a better idea of which offers the most savings.
Negotiate a home buyer rebate with an agent
According to Kevin Schatz, a loan officer at Santa Ana-based Caliber Home Loans, rebates are 100% negotiable.
“We typically see rebates that are given to the buyer with a signed addendum or broker credit letter signed by the agent’s broker,” he says. This negotiated figure can cover all or part of the closing costs charged by the lender, title company, and third parties.”
Negotiating a home buyer rebate will be easier if any of the following apply to your situation:
- You’re buying a higher-priced home, so your agent gets a bigger commission.
- You’re working with a newer agent trying to build their business.
- You’re selling your home with the same agent, so they collect commissions on two transactions.
- You’re shopping in an area with low demand and buyer clients who are hard to find.
You also have better odds of negotiating with your agent to give you a home buyer rebate if you’ve done some legwork for them, like if you’ve already found the home you want to purchase.
“Whether a real estate agent is willing to provide a rebate is [only] one factor that home buyers should consider in selecting an agent,” Brobeck says.
You should also assess prospective agents based on their experience, how well they know the area where you’re looking to buy a home, and their online reviews from previous clients.
How much can I save with a home buyer rebate?
| Home price | 0.5% rebate | 1% rebate | 1.5% rebate | 2% rebate |
|---|---|---|---|---|
| $250,000 | $1,250 | $2,500 | $3,750 | $5,000 |
| $350,000 | $1,750 | $3,500 | $5,250 | $7,000 |
| $410,800 (U.S. median) | $2,054 | $4,108 | $6,162 | $8,216 |
| $500,000 | $2,500 | $5,000 | $7,500 | $10,000 |
| $750,000 | $3,750 | $7,500 | $11,250 | $15,000 |
| $1,000,000 | $5,000 | $10,000 | $15,000 | $20,000 |
Your savings depend on what your agent is willing to offer you and the final sale price of the home that you buy. But let’s look at an example to get a ballpark idea of how much money you can save.
If your agent gave you a 1% home buyer rebate on a $410,800 home purchase—the U.S. median home sale price—you’d get a $4,108 credit at closing, no strings attached.[5]That may seem like a small amount when you’re plunking down six figures on a home, but it still knocks over $4,000 off your closing costs!
In practice, your actual rebate amount will vary based on several factors:
- What rebate your real estate broker or agent is willing to offer
- The home’s final sale price
- Your lender’s approval (and any rules or restrictions it imposes)
Together, these factors determine whether your rebate ends up being a modest perk, or a major cost saver at the closing table.
What are the legal restrictions on home buyer rebates?
Home buyer rebates are legal in 41 out of 50 states and Washington, D.C.
Why do some states ban rebates? Regulators argue that they give certain agents an unfair advantage or pose a risk to the traditional commission structure.
In states where rebates are allowed, they’re still subject to strict rules. For example, rebates can’t be applied to your down payment. As loan officer Kevin Schatz explains, the down payment must come from your own funds, a family gift, or an approved assistance program.
Your lender also determines whether you’re eligible for a buyer rebate. A rebate affects the cost basis of your home—the total amount you pay for the property, including the sale price, closing costs, and any other financial investments you make in the home.
The cost basis affects your mortgage’s loan-to-value (LTV) ratio, a fancy term for the amount you borrowed compared to the value of your home. Because most lenders like to keep a borrower’s LTV ratio at 80% or lower, your lender may need to adjust your loan if a rebate would drive your mortgage’s LTV above 80%. Failing to disclose a rebate to your lender can be considered mortgage fraud, resulting in a large fine or even prison time.
Nonetheless, the U.S. Department of Justice maintains that blocking rebates inflates the cost of real estate services and harms consumers.[6]That’s why it supports legalizing rebates across the country.
Cash back programs, like the one from Clever Real Estate, aren’t as tightly regulated, making them a better choice for many buyers. Since the money comes from a third party outside after the transaction, cash back isn't subject to lender approval and won't impact your financing.
Are home buyer rebates taxable?
No, home buyer rebates aren't taxable. The IRS doesn’t consider them income.[7] The rebate is just money that you’re getting back (not earning) when you purchase a home.
That said, taking a rebate lowers your loan’s cost basis, which could affect your capital gains taxes. Capital gains are taxes you pay on the increase in your property’s value when you sell the home. If you have a lower cost basis upfront, your home can seem like it gained more value than it actually did, which means your future capital gains taxes will be higher.
Quick summary: Home buyer rebates
Key takeaways
- A buyer rebate is when an agent or company gives back part of their commission to the purchaser.
- Rebates can save buyers thousands at closing.
- Some brokerages and platforms (like Clever, Redfin, and Prevu) offer rebates or cash back.
- Clever Cash Back is a popular option: eligible buyers can get up to $500 when they buy and sell with a Clever agent.
- Rebates are legal in 41 states and D.C. They’re banned in 9 states (AL, AK, KS, LA, MS, MO, OK, OR, TN) and restricted in Iowa.
- Rebates are negotiable when offered directly by an agent.
- Lender approval is required for commission rebates, and they can’t be applied to your down payment.
- Rebates aren’t taxable income, but they may affect your home’s cost basis for future capital gains.
FAQ about home buyer rebates
What’s the difference between first-time home buyer rebates and commission rebates?
First-time home buyer rebates are offered by the state or federal government to help people purchase their first property while realtor commission rebates are offered as a buying incentive from the realtor.
Unlike traditional buyer rebates, which come from an agent’s commission, first-time home buyer rebates are grants, tax credits, or other financial assistance from the government for your first home purchase. Some options include no-penalty IRA withdrawals, grants from the U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA) loans, and state-sponsored programs for first-time buyers. You can check with your state’s housing finance agency to see what’s available where you live.
How can a commission rebate help me buy a bigger home?
Since commission rebates are usually closing credits, a buyer’s rebate can increase your purchasing power. But the exact impact will depend on the type of rebate. Commission rebates can be applied toward closing costs but are subject to lender restrictions depending on your loan type. Cash back rebates come after closing, so you can’t use them toward closing costs. However, the benefit of a cash-back rebate is that you can spend the money on whatever you want, whether replenishing your savings account or putting a new carpet in your living room.
Why do agents offer commission buyer rebates?
Realtors offer home buyer rebates to win and retain your business. Offering a rebate after closing can be a good way for agents to encourage home shoppers to close with them. Home buyer rebates also help agents remain competitive amid the growing number of companies with built-in buyer rebates. Additionally, if home buyer demand in their area is waning due to surging mortgage rates and higher borrowing costs, agents may offer a rebate to compete for a dwindling number of home shoppers.
Why trust us
This article was written by Daniel Bortz, a seasoned real estate agent in Northern Virginia, with nearly a decade of experience in the industry. Besides his real estate endeavors, Daniel has extensively covered the housing market as a journalist for major publications including The New York Times, The Washington Post, Money Magazine, Consumer Reports, and Realtor.com.
For this comprehensive analysis on home buyer rebates, Daniel consulted with Kevin Schatz, a loan officer with 21 years of experience at Caliber Home Loans in Santa Ana, California. He also interviewed Stephen Brobeck, a senior fellow at the Consumer Federation of America, known for his extensive research in residential real estate brokerage. Brobeck previously served as the executive director of the CFA from 1980 to 2018.
This article was also edited and reviewed by Steve Nicastro, Managing Editor at Clever Real Estate—the nation's premier real estate education platform for home buyers, sellers, and investors. Before his tenure at Clever, Steve was deeply involved in the Charleston, S.C., real estate market, successfully closing $6 million in transaction volume during 2020 and 2021.