Real Estate Rebate information

The Real Estate Rebate is a growing trend in the residential real estate market.  They allow a buyer to put a large chunk of the realtor’s commission back in their pockets.  When you buy a home with an agent that offers a rebate, you end up paying less for your home than a buyer who does not receive a rebate.

Here’s how real estate rebates work.  When a home buyer buys a home the seller gets the money and then pays both realtors involved in the transaction.  This commission amounts to up to three percent of the purchase price of the property.  So if you buy a home for $400,000 the realtor who helps you can make up to $12,000.  If you receive a real estate rebate for 50% of the commission you would receive a check for $6,000 after the close of escrow. 

Real Estate Rebates are legal in California as in most states and are not taxable by the IRS.  The IRS does not consider your rebate to be taxable income because in truth it is just your realtor giving you back some of the money you paid them.   The good news is that this real estate rebate can be paid to you in addition to any home buyer rebate the government might be offering to stimulate the economy.