If you’re considering buying a house, you’re probably researching things like home prices, mortgages, school districts or closing costs. But, have you considered how a home buyer refund might impact the purchase of your next property?

Whether you’re an investor or a first time buyer, it would be wise to research which real estate agents offer commission refunds in your area. If you’ve already begun working with a Realtor, you should understand how to negotiate a commission refund with your agent.

Agents That Offer Commission Refunds

One of the first brokerages to pioneer the concept of commission rebates was Redfin. The company began offering rebates to clients in the amount of 1% of the final price of the property. Over time, the company phased out the rebate as they became publicly traded and more focused on profitability. Today, Redfin provides a great mobile app and search experience but is no longer offer a commission refund, however they do provide a small credit if you opt to use their in-house mortgage lender.

Since Redfin changed their policy, SimpleShowing.com has filled the gap in terms of commission refunds throughout the United States.

When buying a home, the company provides up to a 1.5% commission refund on new construction properties and 1% on resale homes. On average, SimpleShowing gives buyers about $5,000 and has refunded more than $2M in commissions since 2018.

SimpleShowing Real Estate is a full service brokerage and represents buyers and sellers across multiple markets in the US.

Broker Refunds Explained

So, how do you actually get the money from your agent once they agree to give you a refund of their commission?

Once you go under contract for your property, the commission refund should be expressed in writing in an addendum or exhibit. It does not necessarily need to be a part of the actual purchase agreement, however, the terms of the refund should be agreed upon by the buyer and the broker (not just the agent).

Agent licenses are “hung” underneath a broker. So, while your agent could certainly arrange a side deal, it would be safer and wiser to have the broker themselves agree to the refund.

Once you have a refund or rebate agreement in place, you’ll be entitled to cash or a closing cost credit. Typically refunds are provided at the time of closing and in effect reduce your closing costs, however some refunds could be provided in the form of cash (or a check) after closing.

SimpleShowing, offers both options – either a physical check or a credit on the settlement statement. Credits that occur at closing must be approved by your lender if you’re obtaining a mortgage. To learn more about commission refunds, read our full FAQ section.