What are Commission Rebates in San Diego?

Purchasing a home in San Diego is a dream come true for many. You will get one of the best climates in the nation, gorgeous beaches on the Pacific, and a housing market full of rustic charm and appealing architecture. 

You set aside a hard-earned down payment, did your research on your ideal place in San Diego, and are ready to make one of the most important purchases of your life. So what’s the next step? Buyers can utilize the modern approach of a commission rebate to put more money back in their pocket.

Traditional brokerage is a thing of the past

Traditionally, a seller will hire a listing agent to represent them in a real estate transaction. Homebuyers generally have an agent representing them as well. Once a deal closes on a property, the seller will typically pay a 6% commission fee to the listing agent and that fee is then split with the buyer’s agent. 

Some real estate agents market their services to buyers as "free" because of this commission nuance. But just because the buyer’s agent receives a commission from the seller does not mean the buyer is not bearing the burden of the cost. 

The seller factors the commission into the price of the property to achieve their desired proceeds, but buyers show up with all of the money. While commission is not a line item on  the buyer’s side of the closing statement, it is synthetically embedded in the price.

In the end, the homebuyer walks away with $0 back, and the agents pocket a sizable sum. Prevu is changing all this with a commission rebate, also known as a commission refund.

What are buyer rebates in San Diego?

If a buyer goes the traditional route when buying a home in La Jolla, San Diego, a 6% commission goes to the listing agent, who then splits that amount with the buyer's agent. But buyers represented by Prevu receive a commission rebate, a practice where a real estate brokerage passes a portion of their commission to the homebuyer.

Most traditional brokerages do not offer a commission rebate, but Prevu’s tech-enabled brokerage guarantees homebuyers professional guidance every step of the way, culminating in a commission rebate. 

Prevu offers largest commission rebate in San Diego

Prevu offers savings back to homebuyers and provides an elevated level of service because agents are salaried. By creating fair wages, agents spend less time rushing to close a deal and put more effort into building a relationship with the homebuyer.

Prevu invests in a tech-forward approach, creating a digital platform for homebuyers to use, giving them greater control over their home search and buying process.

Once a buyer chooses a property, they can schedule a tour with the click of a button, and Prevu is with them every step of the way. From analyzing and identifying an ideal purchase price to preparing an offer strategy and managing the negotiations, Prevu’s full service agents collaborate with buyers throughout the entire process. 

Prevu also has a list of trusted referrals that you can take advantage of for any service you might need along the way.

Prevu’s Smart Buyer Rebate is a portion of the buyer’s commission fee, and buyers can transparently see their potential savings on every listing. These savings come in handy for closing costs, buying new furniture, or replenishing personal savings after purchase.

Commission Rebate in San Diego ($2,100,000 home example)

• Sale Price: $2,100,000
• Seller’s Agent Commission (3% of sale price): $63,000
• Buyer’s Agent Commission (3% of sale price): $63,000
• Buyer Commission Rebate (1% of sale price): $21,000

Are commission rebates legal in San Diego, California?

Home buyer rebates are legal in 40 out of 50 states and are also encouraged by the US Department of Justice to benefit consumers who purchase a new home. And California is one of the states that allow brokerages to give a rebate back to buyers. 

Although some agents may tell you that they cannot pay an unlicensed person, that is not the case, as this rule does not apply to a party of the transaction. 

Do homebuyers pay income tax on commission rebates?

Prevu is not allowed to offer tax or legal advice, and buyers should always speak to an accountant about their particular tax situation. That said, the IRS ruling on the matter shares that commission rebates can be treated as a reduction in a purchaser’s cost basis, not income, thus removing any requirement for real estate brokerages to provide a 1099. 

You can read more on homebuyer rebates in the full IRS letter ruling.

​​Prevu Real Estate, Inc. is a licensed real estate broker in California, license number 02134758.