Buyers Rebate – Things Buyers Must Understand Well Before Hiring Agents!

19th January 2019

Buying homes today has become quite easier with the advanced technology. Many agents offer online real estate tools to help you shortlist the right property or house and get you the best deal. But there are few things that you need to understand well before hiring your agent and one among those is real estate rebates. And to help you with that we at Magnolia Realty have answered few of the common questions asked by different buyers. Have a look at it! It might help you out as well!

What are buyers rebate in real estate?

A certain portion of the commission that the broker of the seller offers to the agent who brought the buyer is credited or rebated to the buyer at or after the closing. And this credited or rebated amount is termed as buyers rebate in real estate or commission rebate. The buyer can make use of this rebate for their closing costs and can also take the rebate as cash after the closing. But if you are using a mortgage lender to finance your home then it might not be possible for you to cash the rebate out as many lenders don’t allow doing so.

How Do Buyer Rebates Work in Real?

In a real estate sale the seller offers about 4 to 6% to the agent hired to sell their home and the agent usually offers half of that amount to the buyer’s agent. If the buyer hires an agent who offers a commission rebate then the agent will give them a portion of the commission offered to them by the agent of the seller. And let us tell you that this amount varies depending upon the agent you choose. At Magnolia Realty we offer 2.11% home buyers rebate and our rebate is in addition to any credits given to the buyer by the seller or lender.

Are Home Buyer Rebates Legal?

Buyers rebate are legal in 40 states and the US Department of Justice is in support to make the rebates legal in the rest 10 states.

Are Buyers Rebates Taxable?

No. The buyers rebate is not taxed as your regular income. According to the IRS as per a confirmation released on 30th November 2006, your rebate is a part of the settlement from purchasing the home. And as it is a small portion of a real estate transaction and not an independent payment hence it is not taxed as a source of income.

How Much Rebate will I get?

It completely relies on the agent you have chosen and your ability to negotiate. Always try to find an agent who is great at both price and quality which can take away many hours of negotiations and interviews.

If you have any queries regarding buyers rebate real estate besides the above mentioned ones then do contact us at (301)775-0175 or write to us at We will be glad to help you.