Buyer rebates are legal in California, and they have been for years. A rebate is the part of the commission your own brokerage gets paid on the purchase, handed back to you as a credit at closing. Here it works out simply: whatever the seller's side is offering to the agent who brings the buyer, minus our flat fee, goes to you.
What follows is how that money moves, what the 2024 settlement changed about it, and the places where the credit comes out smaller than anybody would like.
Where the money comes from
Almost every Orange County listing still offers something to whoever brings the buyer. The seller and the listing agent settle on that figure when the house goes on the market, and it gets paid out of the seller's proceeds on closing day.
That money goes to the buyer's brokerage. It always has. We take the same flat fee out of it that we charge a seller, $12,500 under a million dollars and $19,500 for every whole million from there, and what's left is credited to you.
Run it on a $900,000 purchase where the seller's side is offering 2.5 percent. Underneath it are the two examples we publish on our own materials. They're there to show how much the price and the percentage move the answer.
| Purchase price | Buyer's side offered | Our flat fee | Credited to you |
|---|---|---|---|
| $900,000 | $22,500 at 2.5% | $12,500 | $10,000 |
| $800,000 | $20,000 at 2.5% | $12,500 | $7,500 |
| $1,200,000 | $24,000 at 2% | $19,500 | $4,500 |
Based on a total commission model of 5%. Savings vary by property and price. Commissions are always negotiable and are not set by law.
A more expensive house can credit back less. The $1,200,000 purchase in that last row is three hundred thousand dollars above the first one and leaves you with the smallest credit of the three, because the listing is offering half a point less on the buyer's side and our fee is $19,500 above a million. Had that same house offered 2.5 percent, the credit would have come to $10,500. Nobody can quote you a rebate without knowing which house you're writing on.
The commission on any of those sales was going to be paid either way. The portion above our fee is what ends up on your side of the closing statement with your name next to it.
What the settlement changed
The National Association of Realtors settlement rules took effect in August 2024. Two of the changes matter for a rebate.
You sign a buyer representation agreement first. Before an agent can show you a house, that agreement has to be in place, and it has to state what your agent is paid and how it's figured. Open-ended language about taking whatever the seller happens to offer isn't allowed anymore. You and your agent set that figure up front, in writing, and it's negotiable like everything else in this business.
The buyer-side offer left the MLS. Listing agents stopped publishing compensation in the feed. It still exists on most listings around here, because a seller who offers nothing shrinks their own buyer pool on purpose, and the amount now varies more from house to house than it used to. Somebody has to call and ask. On our side your agent does it, while you're still deciding whether you want the house.
Put those together and the rebate has a cleaner shape than it did in 2023. Your agreement with us sets what we're paid. When the listing offers more than that, the difference is yours. When it offers less, the gap gets negotiated into the deal, usually as a seller credit, or you cover it. All of that is a conversation to have while you're still choosing which house to make an offer on.
How it lands on your closing statement
A rebate is a line on the settlement statement escrow prepares. It lowers the cash you wire in to close. You see it on the estimated statement well before signing, and you see it again on the final one.
Because it sits on that statement, your lender has to sign off on it. Most do. Some loan programs cap a buyer credit at your actual closing costs and prepaids, which means a large rebate on a purchase with small closing costs might not be usable in full. A few programs handle credits differently, and some won't allow one at all.
Ask your loan officer early. It takes five minutes, and no other question changes what your rebate is worth as much. If the credit doesn't fit your loan, tell us in week one rather than week four; it changes what we'd suggest you do about it.
This is general information about how these transactions usually work, and it isn't legal, tax, or lending advice. Your lender decides what's permitted on your loan, and your own tax person is the one to ask about anything tax related.
When the rebate is small, or zero
The fee is flat, so on a smaller commission it takes a bigger share of it. At 2.5 percent offered, a purchase under about $500,000 leaves nothing after the fee and the rebate is zero. Not many single-family houses in this county price out down there. Condos do.
A few other things pull it down:
- A lower buyer-side offer. Half a point is worth $6,000 on the $1,200,000 purchase in that table. It's the biggest variable you have no say over, decided by somebody else on their listing before you ever saw the place.
- Nothing offered at all. It happens. Some flat-fee-MLS sellers and a few builders offer zero. Then there's no rebate to discuss, and who pays your side becomes one more term in the offer you write.
- The deal falls apart. Rebates are paid at close of escrow. No closing, no credit, and no bill from us either.
When you'll know your number
Every figure on this page is an illustration. The commission on your purchase goes into the offer your agent writes, so the real cash back is set once the seller accepts. Before that, your agent can tell you what tends to be offered on houses like the one you're looking at, and that's a working number.
Send an address, or the price range you're shopping in, and your agent will walk you through what the buy side usually looks like there. Run it past your loan officer early so you know your program takes a credit at all.
Ask the same of any brokerage advertising a rebate, and ask for it in writing before you sign a representation agreement with anybody. What's the fee, what's the co-op on this house, what's left, and does my lender allow it. If our answer doesn't come out ahead on the house you want, we'll tell you that too.