What are Commission Rebates? Educated Homebuyers Need to Know!

A commission rebate is a portion of the buyer agent’s commission that the agent gives back to the buyer. It is not a discount from the seller and it does not change the sale price.

The money moves at closing. Depending on your lender, it appears as a credit toward your closing costs on the settlement statement, or it is paid to you directly shortly after closing.

Because the rebate is generally treated as an adjustment to the purchase price rather than income, most buyers do not receive a 1099 for it — but confirm your own situation with your tax professional.

Payment of the rebate is subject to the consent of the party the licensee represents in the transaction.