How Does A Real Estate Commission Rebate Work?

One of the first steps in buying Washington DC real estate is picking an agent. Experienced? Check. Trustworthy? Check. Do they give a rebate? Ummm, what?

If you have never heard of buyer agent commission rebates, you are not alone. They are the big secret the real estate industry does not want you to know about and can save you a ton of money. To be more specific, at Mongolia Realty, we provide a full service for a more reasonable fee of 0.89% of the sales price or $5,500, whichever is higher. The remaining portion of the commission paid to us by the selling is rebated to the buyer at closing. Yes, this is completely real, true, and legit! Those renovations you wanted to do! New furniture for the place! A real estate commission rebate can go a long way towards paying for part or all of that, so, let’s make sure you get one!

So, what is a real estate commission rebate? 

Simply put – cashback at closing. But, there is a bit more to it. According to the United States Department of Justice, the Realtor rebate commission is usually calculated as some fraction of the broker’s commission and can result in thousands of dollars being returned to the consumer.

In other words, A real estate commission rebate is – money that your real estate agent will refund to you at closing. For example, when a buyer buys a home, a great part of the purchase price goes to pay off commissions to the agents involved. The real estate agent typically receives a commission equal to 3% of the home bought price. A real estate agent commission rebate is a portion of the 3% commission that the real estate agent will rebate to the buyer at closing.

Why would a real estate agent rebate their money to me? 

Real estate agents will rebate their commission to you for several reasons. The first reason being – the agents operate efficiently and pass on those incentives to you to choose them over other agents.

Buying a new property can be an overwhelming, exhausting, and complex process. However, the best real estate agents make use of technology to enhance their operational efficiency, streamline processes, and improve the home buying experience. This results in minimized operating expenses. And many of those agents are willing to pass those savings on to you in the form of a real estate commission rebate. And yes, these are the type of agents you want to work with.

How does a Realtor rebate commission work? 

For example, let’s say, you bought a home for $300,000. The seller would then pay 6%, to split between the two agents who are part of the transaction. Out of which, 3% is to the listing agent and 3% to the buyer’s agent. With $9,000 newly in the real estate agent’s account, the agent would then rebate up to 33% of their commission (which makes 1% of the home’s buying value) to you (the buyer) at closing.

Now that you are armed with the real estate commission rebate knowledge, and, considering buying a home – what’s next? Contact Magnolia Realty, and from contract to close we are there for you.

Have an awesome home buying experience!