Are Commission Rebates Legal in Virginia?

If you haven’t heard of commission rebates, now is the time to get acquainted.

Virginia’s housing market has always been in demand; it’s close to Washington, D.C., has some of the best places to live in the nation, and has a wealth of historic homes to explore.

But buying a home in Virginia isn’t easy, and affordability can be a huge factor for most aspiring homebuyers. That’s where commission rebates come in. 

Rebates are effective tools for homebuyers to save money when buying a home, yet many brokerages don’t offer them. 

Below, our team from Prevu Real Estate has put together everything you should know about commission rebates, including how they are legal in Virginia and how to receive one when buying a home. 

What is a commission rebate?

In simple terms, commission rebates put cash back in your pocket after you buy a home. That cash comes from your broker, who returns a portion of their commission back to you as savings.

Traditional real estate transactions typically involve a 6% commission the seller pays to the listing broker after a successful transaction. If the buyer was also represented by an agent, that commission would typically be shared between both brokers. Because of this, many brokerages will claim that representing a buyer is free of charge. 

Though true on paper, that isn’t exactly the case.

A seller will account for the commission costs when determining the asking price for their home. Because buyers are usually responsible for most of the closing costs, they technically cover expenses they could actually be saving on.  

Modern brokerages like Prevu invest in salaried real estate agents and a streamlined digital homebuying platform to change this outdated practice and unlock commission rebates for aspiring homeowners. Buyers who choose to work with a Prevu agent can receive up to two-thirds of their agent’s commission after closing.

Are commission rebates legal in Virginia?

Because some states haven’t legalized commission rebates, there can be some confusion about how the process works.

Luckily, Virginia is one of 40 states where buyer rebates are legal, so you can work with a brokerage that offers them.

As you begin to explore how commission rebates work, you may come across some brokerages saying the practice is illegal because it constitutes "paying an unlicensed person." That is simply misinformation because the rule doesn’t apply to buyers. 

To clear up any further doubt, the Justice Department even issued a letter identifying commission rebates as a pro-consumer practice that can stimulate the real estate market and help make homes more affordable.

How do I get a commission rebate in Virginia?

In short, you must work with a brokerage that offers commission rebates.

For this reason, it can pay off to interview multiple buyer agents when choosing who will represent you. Besides offering a commission rebate, a brokerage should be transparent with their services, clear with communication, and be available at every step of your homebuying journey.

For instance, Prevu currently offers the largest rebate in Virginia, but with that offer comes a full-service brokerage backed by experience. Home buyers gain access to an online homebuying platform designed to seamlessly connect you with a dedicated local agent, help you curate your home search, and allow you to book property tours with the click of a button. 

Each listing even displays an estimate of the commission rebate you can expect if you buy with Prevu. 

The extra money can help you replenish savings after a hefty downpayment, prepare a budget to furnish or renovate your home, and help offset closing costs.  

Interested in buying a home in Virginia? Browse listings and see how much you can save with Prevu's Smart Buyer Rebate.