In many Ontario real estate transactions, the seller agrees to pay remuneration to the brokerages involved in the sale. When the buyer’s brokerage receives its share, it may return an agreed-upon portion to the buyer as a rebate.
For example, suppose the buyer’s brokerage receives $10,000 from a transaction and has agreed to provide the buyer with a 25% commission rebate. The buyer would receive $2,500, subject to the terms of the agreement.
The rebate normally does not reduce the purchase price of the home or replace the buyer’s down payment. It is generally paid after the transaction has closed and the brokerage has received its commission. Buyers may use the money however they choose, such as helping with moving expenses, purchasing furniture, making improvements or rebuilding their savings after closing.
The amount of a Buyer Commission Rebate can vary because the commission received by the buyer’s brokerage is not necessarily the same in every transaction. Some properties may offer a different amount of commission, while others may offer none at all. Any rebate arrangement should therefore be clearly explained in writing, including how it will be calculated, when it will be paid and whether any conditions apply.
Most importantly, receiving a rebate should not mean receiving less representation. The buyer’s REALTOR® still has professional responsibilities to protect the buyer’s interests, provide competent advice and show suitable properties regardless of the commission being offered.
A Buyer Commission Rebate is simply a way for a brokerage to share part of its earned commission with its buyer client—giving the buyer some additional money back after a successful purchase.
