Here’s How to Get a Home Buyer Rebate in Your State

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  Written by Ashley Simon

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  Edited by Josiah Wilmoth

Are realtor rebates worth it? | Find home buyer rebate programs near me

If you’re buying a house in a state that allows home buyer rebates, you should try to get one. Finding a realtor you like that offers rebates could potentially save you thousands of dollars — without any real trade-offs. 

Most buyers can choose from multiple local brokerages that have commission rebate programs. There are even free companies that match you with top-rated local agents — and provide cash back to eligible buyers after closing!

If you’re just looking for the largest rebate available, some discount real estate brands advertise huge savings. But availability is limited and there are significant trade-offs, including complicated eligibility criteria and reduced hands-on service from your agent.

We’ve researched more than a dozen nationwide and regional companies that offer real estate rebates — and combed through thousands of customer reviews — to find which brands offer the biggest savings and best overall value.

👉  More sections: Who is this guide for? | Full list of realtor rebate programs | How commission refunds work | Tips for choosing a rebate | Find realtors who offer rebates near you | FAQ

Who should look for a realtor rebate?

Most home buyers in eligible states should try to find a realtor who offers rebates. After all, it’s free cash. Real estate rebate programs are becoming increasingly common, so there’s a good chance you can find a great local agent that offers buyer refunds.

That said, some home buyer rebate programs offer more value than others. Here are some factors to consider when comparing the options available in your area.

What kind of home buyer rebate is it?

Some home buyer rebate programs distribute refunds as a closing cost credit. Others give you cash back, which means you get an actual check after closing.

Closing cost credits often promise the biggest savings. But in practice, that’s not always the case. Your agent can’t guarantee the full rebate amount because closing cost credits have complicated restrictions and require lender approval.

Depending on your loan type and what seller concessions you negotiated in your purchase contract, your lender might be forced to limit the size of your rebate.

Cash-back refunds don’t always advertise the largest savings, but the full rebate amount is guaranteed on all purchases that match the eligibility criteria. You get the money after closing, so the refund doesn’t affect your loan situation — and won’t require lender approval.

Not needing lender approval means you don’t have to worry about last-minute snags that could put your rebate in jeopardy. And since the company issues your rebate as cash, you can spend the money however you want.

Will there be any service trade-offs?

When comparing home buyer rebate programs near you, refund size isn’t the only factor you should consider. Make sure you’re getting an agent who will provide enough hands-on service for someone with your level of real estate experience.

Clever and UpNest are a great fit for buyers of all experience levels. Both companies partner with traditional agents from top brokerages like RE/MAX and Keller Williams to offer rebates. Buyers don’t have to worry about service trade-offs because they’ll get the exact same experience as working with a traditional agent who doesn’t offer rebates.

Other discount brands offer larger rebates, but usually at the expense of personalized customer service. Agents at these companies juggle many customers at once, which lets them offer bigger savings but gives them less time to devote to each individual client. You may not even work with a single, dedicated agent throughout the entire process — the company may send you a different agent each time you want to tour a house.

The bottom line is that a huge rebate can sound good on paper, but if you compromise on agent quality or customer service, the trade-offs might not be worth it. Going with the wrong agent could mean getting a worse deal on a house, or potentially not getting the house at all.

Full list: The best home buyer rebate programs

👉 Sections: Nationwide brands | Regional options | Tips for choosing a realtor rebate program

Top home buyer rebates available nationwide

Clever Real Estate

Clever Real Estate has the best home buyer agent-matching service available nationwide. It offers much better agent support than any of the regional brands we’ve researched.

Customer service sets Clever apart from regional brands that advertise large rebates. One of Clever’s licensed Concierge Team members will hand-pick agents for you from local brokerages, including top brands like Century 21 and Coldwell Banker. 

Since you’ll be working with a traditional agent, you won’t have to worry about service trade-offs. You’ll get all the service and support you expect from a local realtor. In addition, eligible buyers can earn cash back after closing.

UpNest

UpNest is a free service that can match you with local real estate agents — and potentially get you a home buyer rebate.

Whether you’ll actually get a rebate depends on what agents UpNest matches you with. Some agents offer rebates to win your business, but they aren’t required to — and you won’t know if you’re eligible for savings until after you sign up. UpNest also offers every buyer a $150 gift card, but this isn’t much of an incentive on its own.

When we mystery shopped UpNest, we found that agents typically quoted rebates ranging from 0.3–0.75% of the sale price (when they offered rebates at all). Agents are more likely to offer larger rebates if you’re buying a higher-priced home.

If you do get a rebate through UpNest, you’ll receive it as a closing cost credit. This type of rebate has more eligibility restrictions than cash-back refunds. And since closing cost credits impact your loan underwriting process, your agent can’t guarantee the full rebate amount up front.

UpNest and Clever are both free and easy to use, so it’s a good idea to request agent matches from both services. Compare savings, experience, and overall value to find the agent who’s the best fit for you.

Redfin

Redfin is one of the most well-known discount real estate brands, but its realtor rebate program doesn’t offer much value for most buyers.

Based on our research, the average Redfin rebate is just 0.22% of the home price. But Redfin doesn’t advertise a set rebate amount — size and availability both vary between markets. To see how much you can actually save — or if Redfin’s buyer refund is available in your area at all — go to Redfin.com and look for listings in your area and price range.

Another downside to buying with Redfin is that you don’t get to work with a traditional agent — you’ll work with a Redfin agent instead. Redfin has plenty of good agents, but they provide less hands-on support than traditional realtors — and tend to work with a lot more customers at once. 

Redfin’s customer service model is fine for many experienced buyers if you live in one of the few locations where Redfin’s largest rebates are available. But if you’re a first-time buyer — or it’s been a few years since your last purchase — you might feel more comfortable navigating such a huge financial decision with the help of Clever or UpNest.

Regional brands that offer bigger savings (but less hands-on service)

In addition to the nationwide home buyer rebate programs listed above, there are a variety of regional brands that might be available in your area.

Most of these discount brokerages advertise bigger rebates than their nationwide competitors — typically 1–2% of the home price — but they also tend to have larger service trade-offs. They’re only worth considering if you’re a very experienced home buyer and don’t need an agent to guide you through every step of the process.

Prevu

Prevu’s Smart Buyer rebate is a good option if you’re buying a higher-priced home in California, Connecticut, Massachusetts, New York, Pennsylvania, or Washington state.

On eligible purchases, Prevu offers a 2% commission rebate, which is the largest buyer refund we’ve seen. But you’ll only qualify for the full rebate on homes worth close to $1 million or more. Buyers with smaller budgets will receive much smaller rebates — if they qualify for one at all.

Prevu agents offer a similar level of service and support to Redfin. You should expect less hands-on service than you’d get with a traditional realtor, but if you’ve bought and sold a lot of homes, the potential savings may be worth the trade-offs.

» MORE: Read the full Prevu review

Trelora

Trelora is worth considering if you’re an experienced home buyer with a budget under $350,000. You could earn up to half your agent’s commission — typically 1–1.5% of the purchase price — even on homes in lower price ranges. But it’s not a great option for buyers with larger budgets because it caps rebates at $6,000 maximum.

Trelora also has some pretty major service risks, even compared with its peers. Our biggest concern is that Trelora agents handle 20x as many customers as the average realtor. It’s just not possible to give customers as much hands-on, personalized service when you’re handling that kind of volume.

» MORE: Read the full Trelora review

SimpleShowing

SimpleShowing advertises a fairly large rebate and has fewer service drawbacks than Trelora. But complicated restrictions prevent the average buyer from qualifying for the full rebate.

When you buy a qualifying house with a SimpleShowing agent, you’ll get a closing cost credit worth up to half of the buyer’s agent commission. To earn the maximum SimpleShowing rebate, buyers must tour five or fewer homes before making a purchase. Once you’ve looked at six homes, the rebate amount starts to shrink, and it gets smaller the more showings you schedule. 

The average buyer tours nine homes before making a purchase, so you’ll need to be more decisive to earn the full SimpleShowing refund. Unfortunately, how many homes you look at before you buy isn’t always under your control — especially if you’re buying in a hot market where bidding wars are the norm.

» MORE: Read the full SimpleShowing review

Homie

If you’re buying in a market where cash offers are common, Homie might be a good fit. Homie lets you borrow the funds to place all-cash offers on homes, and you can also earn a commission rebate worth up to half the buyer’s agent fee.

But like Trelora, Homie has some major service trade-offs. Homie agents handle about 10x as many transactions as typical realtors. With your agent juggling so many other customers at once, you should expect less personalized customer service than you’d expect from a traditional agent.

Another downside is that Homie requires buyers who want a rebate to use the company’s in-house mortgage and title services. Letting Homie handle your loan underwriting and closing is convenient. But if other local companies offer better rates, you’re essentially overpaying on your mortgage and closing fees to get a commission rebate.

» MORE: Read the full Homie review

Tips for choosing a realtor rebate program

👉 Find tips for: First-time buyers | Experienced buyers | Budgets under $150k | $500k budgets | Budgets over $1 million 

First-time buyers should choose the best agent (not the biggest rebate)

If you’re a first-time home buyer, your top priority should be finding the best agent, not the largest realtor rebate. Companies like Clever and UpNest are a great fit for buyers of all experience levels because they match you with a traditional realtor, so you’ll get full service and support.

Having an experienced real estate agent on your side to help you find the right house and negotiate a great deal is more important than saving a few extra bucks. Choosing the wrong house because your agent didn’t give you enough hands-on service could cost you a lot more in the long run than you’d gain from the rebate.

Experienced buyers can get larger rebates if they do more work themselves

If you have lots of real estate experience and don’t need an agent to guide you through every step of the process, it’s worth considering whatever discount brand that offers the largest rebate available in your area and price range.

Homie, Prevu, SimpleShowing, and Trelora all offer sizable commission rebates, depending on your budget. If you’re buying in a larger market, there’s likely at least one of them available in your area.

Find a realtor rebate program that fits your budget

It’s important to find a realtor rebate program that fits your budget. Most companies have minimum commission fees, which means your agent must earn a set dollar amount before they’ll give you anything back. You won’t earn a full rebate if you buy a lower-priced home and your agent’s commission is below the cut off.

Find a home buyer rebate program near me

To find a home buyer rebate program near you, select your state in the table below. Click on each company’s name to read in-depth reviews.

Note: If your state is isn’t listed in the table above, you may be in an area where home buyer rebates aren’t legal (or are heavily restricted).

When rebates aren’t an option (or aren’t worth it)

If you’re buying in a state where rebates aren’t legal or your budget is less than $150,000, finding a buyer refund shouldn’t be your top priority. You either won’t qualify for a rebate, or you won’t save enough to affect your decision to choose one agent over another.

In either case, your best option to save money is to hire a realtor who’s an expert negotiator. Even if you don’t get a rebate, the right agent can help you negotiate a great deal on a house — and keep more of your hard-earned money in your pocket.

The easiest way to find a great local buyer’s agent is to use a free agent matching service like Clever, UpNest, or HomeLight. These companies connect you with agents in your area so you can compare your options and choose the best fit for you.

Another way to save money when buying a house is to shop around for closing costs, rather than just going with whatever companies your lender or agent recommends. Getting multiple quotes from local service providers will take a bit more time, but finding lower rates could reduce your closing costs by hundreds or thousands of dollars.

How home buyer rebates work

Negotiating a buyer rebate | Where they’re legal | Tax considerations | First-time home buyer rebates | Real estate rebate FAQ

Companies or agents often advertise or offer home buyer rebates as a percentage of the final sale price — for example, a 1% rebate on a $500,000 home would equal $5,000.

Sometimes agents offer rebates as a percentage of the fee they earn on the sale, which is a little more complicated. As an example, if an agent earns a 3% commission and offers you a 50% rebate, you’d get back half their commission, or 1.5% of the sale price. 

You receive the rebate at closing, usually in the form of a closing credit. This means you can only spend it on certain closing costs, like:

• Appraisal fees
• Buying points on your mortgage
• Escrow fees
• Loan origination fees
• Transfer fees

Whether your agent or their brokerage offers a built-in rebate or you negotiate one yourself, the rebate amount should be specified and agreed upon at the outset, before you start touring houses.

» JUMP: Back to our top home buyer rebate program recommendations

Advantages of cash back over commission rebates

We recommend looking for a real estate company or brokerage that offers cash back instead of commission rebates. Cash back comes in the form of a check after closing instead of a credit, which offers some big advantages.

Because you get cash back after the transaction, you can spend it however you want with no limitations.

Cash back isn’t subject to the same rules — i.e., lender approval — because it’s coming from a third-party outside of the transaction.

Even still, you should let your lender know you’re getting cash back just to be safe.

Real estate commission fees and rebates, explained

Commission rebates come out of the commission fee your agent earns on your purchase. So to understand how rebates work, you really need to understand how realtor fees work.

In a conventional real estate transaction, the seller will be on the hook for a total commission of about 6% of the final sale price. The two agents involved in the deal typically split the total commission:

• 3% goes to the seller’s agent, for marketing the home.
• 3% goes to the buyer’s agent, for bringing their client to purchase the home.

Your rebate is a portion of your agent’s 3% cut of the total commission fee.

So if your real estate agent promised you a 50% rebate of their commission, that’d be equivalent to 1.5% of the final sale price.

Or conversely, if your agent promised you 1% of the final sale price, that’d be roughly 33% of their commission.

It’s important to clarify with your agent up front whether the rebate percentage they’re offering refers to their commission fee or the home’s sale price. Using the example of a $300,000 home below, the higher percentage doesn’t always equal the higher rebate.

How much can you save with a home buyer rebate?

Home buyer rebates can potentially save you thousands of dollars when you purchase a new home.

How much you’ll save depends on the purchase price and the structure of the rebate.

Use this table to get a better idea of just what a home buyer rebate would look like at different price points:

The U.S. Department of Justice has a realtor rebate calculator you can use to figure out your exact rebate amount.

Unfortunately, there are no guarantees when it comes to your rebate. While a company or agent may advertise a certain percentage, the lender could ultimately reduce that amount — or reject the rebate entirely! 

Cash back, on the other hand, flows through a third party and is refunded after the transaction. As such, it’s usually not an issue for the lender. If you qualify for a cash back program, you’ll likely receive the full, promised amount and be able to spend it however you’d like. This makes cash back a better choice for most buyers.

» SAVE: Find a top local agent, get cash back after closing

Why do buyer’s agents offer commission rebates?

Buyer’s agents offer commission rebates to:

• Attract and retain new customers. Buyers may be more inclined to work with an agent who promises they’ll get several thousand dollars back. And since most buyers don’t sign exclusive contracts with their agents until they submit an offer, rebates provide more incentive for a buyer to stick with an agent throughout the process rather than shopping for houses with multiple agents.
• Make a transaction more affordable. Closing costs can be expensive. For buyers, they’re usually 3-5% of the sale price. On a $300,000 home, that’s as much as $15,000. A buyer who gets thousands of dollars back may be better able to afford these costs.
• Remain competitive. A growing number of companies offer buyer rebates. Agents may feel they need to do the same to avoid losing business. 

How to negotiate a buyer rebate with your agent

Negotiating a buyer rebate on your own is possible, but it’s difficult to do if the agent isn’t already offering one. We recommend finding a real estate company that offers built-in rebates or cash back instead.

You have better odds of negotiating a home buyer rebate if you’re:

• Purchasing a high-priced home, as your agent will receive a large commission
• Working with a newer agent who may find it more difficult to attract customers
• Buying and selling a property with the same agent, so they’ll be getting both commissions
• Buying in an area where demand is low and your agent may not have a lot of other business

Many agents are resistant to offering commission rebates because it means they earn less money. They may not think it’s worth their time.

How to increase your chances of a real estate rebate

To maximize your chances of successfully negotiating a real estate rebate with your agent:

• Do some of the legwork for your agent. If you’ve already done the hard work of finding a property and you just need help making an offer, an agent may be willing to reduce their commission in the form of a rebate.
• Use the same agent to sell your property. Since the agent will earn a commission for both transactions, they may be more willing to offer a discount.
• Buy a property the agent is selling. Dual agency isn’t legal in every state, though, and there’s an inherent conflict of interest since the agent represents the seller too. Make sure you fully understand the risks before agreeing to a dual agency sale!

Where are home buyer rebates legal?

Home buyer rebates are legal in 42 out of 50 states.

If you live in these states, you can work with an agent that offers a rebate, try to negotiate for a rebate, or work with a company that offers rebates or cash back.

Some states do limit the size and type of rebate, so it’s important to check the regulations in your specific state.

States where home buyer rebates are banned

The real estate lobby has pushed to have rebates banned in eight states, including:

• Alabama*
• Alaska
• Kansas
• Mississippi
• Missouri
• Oklahoma
• Oregon
• Tennessee 

In these states, agents can’t offer you money back or any type of gift to entice you to use their services.

*Alabama and home buyer rebates

Alabama doesn’t allow commission rebates. But certain types of incentives are allowed, including some cash-back programs and other gifts, so long as the incentive is disclosed to all interested parties (typically the buyer, lender, and seller).¹Source:Alabama Real Estate Commission. 'Gifts, Rebates, & Kickbacks.' https://arec.alabama.gov/arec/pages/media/publications/briefly_legal.aspx?AspxAutoDetectCookieSupport=1

If someone offers you an incentive or cash back in Alabama, check with your lender to make sure it’s allowed.

Iowa and home buyer rebates

Iowa technically allows buyer rebates, but it limits them to dual agency sales. Dual agency is when one agent represents both the seller and buyer.

These types of transactions are often suspect because the agent isn’t neutral. The agent will also be looking out for the seller, meaning you may not get the best deal.

New Jersey and home buyer rebates

New Jersey allows buyer rebates but prohibits rebates to sellers.

Even where legal, buyer rebates are often highly regulated

Even in states that allow buyer rebates, they’re still governed by strict rules and regulations.

For example, you can never use a rebate to fund your down payment. Your lender will have additional stipulations.

Home rebates depend on your lender

Your lender has the ultimate say on whether you can have a home buyer rebate. That’s because a buyer rebate affects the cost basis of your home.

Your rebate cancels out some closing costs, lowering the cost basis of your home.

Lenders use the cost basis to calculate your loan-to-value (LTV) ratio, which is the amount you borrowed compared to the value of your home. You can calculate it by dividing the amount of your loan by the cost basis of your home.

If your LTV ratio changes, your lender will need to adjust your financing to keep the ratio low. Ideally, lenders like to keep the LTV ratio at 80% or lower.

Here’s a quick example of how a $5,000 commission rebate on a home that costs $250,000 can make your LTV ratio too high.

Not disclosing a rebate can result in your financing falling through, or in worst case scenarios, mortgage fraud.

Cash back isn’t as regulated

When a realtor gives cash back to the buyer, the rebate doesn’t cause these issues since it’s distributed after closing. It doesn’t affect the cost basis or LTV ratio, so it’s usually not a concern for lenders.

You won’t have the chance to use it on closing costs, but it’s a nice way to replenish your bank account afterward.

While cash back technically takes place outside of the transaction and, therefore, doesn’t really fall under your lender’s purview, it’s still a good idea to disclose it to them, just in case.

Buyer rebates must be disclosed on your HUD-1 settlement form

If you’re getting a rebate as a closing credit, you also need to disclose it on the HUD-1 settlement form, which covers all settlement costs.

Your agent can help you figure this out. All of the rebate info goes on lines 204-209. You’ll also include the name of the person issuing the rebate, which is typically your agent and/or their broker.

Are home buyer rebates taxable?

According to the IRS, home buyer rebates aren’t taxable.

That’s because you aren’t actually getting any income with a rebate. It’s money you already had, just coming back to you at the end of the transaction.

That said, real estate agent rebates could affect your taxes through cost basis. This is all the money you’ve put into a home.

Taking a rebate lowers the cost basis, which could affect capital gains taxes.

A lower cost basis up front can make it seem like your property gained more value than it really did, increasing taxes in the future.

Still, this tax increase should be pretty minimal. Also, you may be eligible for an exemption on capital gains from your main home on up to $500,000 in gains. If you’re concerned, talk with a tax professional to get advice about your specific situation.

First-time home buyer rebates vs. regular commission rebates

First-time home buyer rebates are different from the realtor commission rebates we’ve been focusing on in this piece. These rebates are offered by the state or federal government to help people purchase their first property.

The Housing and Economic Recovery Act created a federal tax credit of $7,500 for first-time home buyers, but this benefit expired in 2010.

Now, you’ll need to look a little harder to find a tax credit, grants, and other assistance for your first home purchase. Some options include:

• No-penalty IRA withdrawal: You can withdraw up to $10,000 from your IRA for a home purchase without the 10% penalty for early withdrawal.
• HUD grants: The U.S. Department of Housing and Urban Development (HUD) funds non-profit organizations across the country that can help you with buying a house if you meet certain criteria.
• FHA loans: The Federal Housing Administration (FHA) offers FHA loans to new homebuyers. These loans require a lower down payment than traditional loans and may come with lower interest rates.
• State-specific programs: Each state has its own programs to help first-time home buyers. Check with your state housing finance agency to see what’s available where you live. 

You may be able to get both first-time home buyer rebates and normal home buyer rebates as long as you work with an eligible agent or real estate company.

Look for a great agent

Rebates can potentially put money back in your pocket after you close on a home, which is a great thing. But, there’s a lot of red tape and you shouldn’t necessarily bank on them. 

That’s why it’s better to look for an agent who can help you get a great deal on your home.

If you’re not sure where to start your search for a realtor, try a free agent-matching service like Clever Real Estate.

Clever matches you with buyer’s agents from top-rated brokerages in your area, such as Century 21 and RE/MAX. Interview as many agents as you want until you find the right fit — or walk away at any time with no obligation.

FAQ about home buyer rebates

Related links

If you’re interested in learning more about buying and selling homes, these additional resources can help. 

The 10 Best Home Buying Websites: Zillow, Homes.com, and RealtyTrac are among the top 10 websites for home buyers. Learn about these and other websites that can help you find your perfect property. 

Realtor Fees: Your Questions, Answered: Find out who pays real estate fees, how much they cost, and more in this helpful guide to the costs of working with a real estate professional.

Buyer’s Agents: What They Are and What They Do for Home Buyers: Buyer’s agents offer important assistance when looking for a property and making an offer. Learn how a buyer’s agent can help you throughout your purchase process. 

Millennial Home Buyer Report (2022 Data): We surveyed 1,000 home buyers to learn about their plans, dreams, and anxieties — including the risks they’re willing to take in order to purchase a home.

Negotiating Realtor Fees: 5 Tips to Lower Commission: Negotiating real estate fees centers on knowing the market and your situation, then using that info while talking to multiple agents.