Commission Rebate Bay Area: Buyer's Guide to Savings
By Sean Creamer on March 17, 2025
Buying a California home is no easy feat. But it is even harder to narrow down a choice in the San Francisco Bay Area.
There are many reasons to move to the Bay Area. Silicon Valley offers a diverse array of jobs across the high-tech and start-up space. Plus, lush forests and mountains ring the Bay, putting the great outdoors within reach.
The exclusivity of the region means inventory is tight, and the prices are high in the Golden City. These conditions drove some buyers out of the market, but savvy searchers got creative and found ways to increase their purchasing power.
Many people rely on buyer’s agents for their home search. By teaming up with a broker that offers a commission rebate, home buyers can save a significant amount of money. However, many buyers do not know about rebates or how they work.
So our team prepared a guide to educate buyers how to save money after purchasing a home.
What is a commission rebate?
Commission rebates are a simple concept and valuable to understand.
Sometimes called buyer rebates or commission refunds, the practice allows buyer’s agents to provide a portion of the broker commission back to new homeowners once they close on a house. A buyer's agent can significantly influence the financial aspects of purchasing a home, including negotiating commission rebates which can provide buyers with substantial savings on closing costs or overall home prices.
Prevu Real Estate offers the largest commission rebate in California. Because of the brokerage’s investment into their digital homebuying platform, the search process is simplified for buyers, and the transaction process is streamlined for agents, creating an opportunity to unlock huge savings for homebuyers in the San Francisco Bay Area. Prevu's services cover the full range of neighborhoods across Bay Area cities, including San Francisco, North Bay, East Bay, and South Bay.
The benefits of a commission rebate are clear as day. Bay Area buyers can unlock thousands of dollars in savings at closing through rebates. Depending on the cost of the purchased home, the capital can help furnish the new abode or cover the cost of remodeling a bathroom or kitchen.
House hunters can even use the savings to place higher offers, knowing they stand to receive that money back at closing.
Commission Rebate San Francisco Bay Area
- Purchase Price: $2,000,000
- Listing Agent Commission (3% of Purchase Price): $60,000
- Buyer’s Agent Commission (3% of Purchase Price): $60,000
- Commission Rebate (1% of purchase price): $20,000
How commission rebates work in the Bay Area
Commission rebates are a popular way for homebuyers in the Bay Area to save money on their purchase. Here’s how they work:
When you work with a real estate agent who offers commission rebates, you can expect to receive a portion of a seller-paid buyer's agent commission back as a rebate. This rebate is typically a percentage of the purchase price of the home and can vary based on the amount of the seller-paid buyer's agent or the percentage that the rebate brokerage offers to clients. The rebate is usually paid to you at closing and can be used to offset closing costs, pay for home repairs, or even help replenish your savings after the down payment.
By taking advantage of commission rebates, you can save a significant amount of money on your home purchase, making the home buying process a bit easier on your wallet.
How to find a broker offering commission rebates
Oftentimes, people choose their real estate agents based on recommendations from friends and family. Or worse, fledgling buyers work with the first agent they meet.
But since buying a home is usually the most expensive transaction a person makes in their life, they should put the time in to interview as many agents as they can.
Ask agents about their real estate experience across the Bay Area. Expert brokers should be able to walk you through the home buying process, explaining how their talents can help you secure the home of your dreams in Palo Alto or Fremont. But most importantly, buyers need to ask if the agent can provide them with a buyer rebate in the Bay Area.
Additionally, some brokers offer a flat fee pricing structure, which can benefit buyers by providing a fixed cost for services and potentially pairing it with cash rebates or discounts.
The truth is that many people do not know what a commission rebate is. And this is by design. Traditional brokers work off commission, so the concept of rebating would reduce the amount the traditional broker makes on a closing.
Some buyer’s brokers market their services as free as man sellers still choose to offer a buyer's agent commission to incentivize a sale. But since the new homeowner provides capital at closing, the broker fee is included in the closing costs. Essentially, traditional brokers hold buyers back from significant savings. But by asking prospective agents the right questions, buyers can unlock sizable savings by working with a buyer’s agent who offers commission rebates.
Choosing the right real estate agent for your home buying needs
Choosing the right real estate agent is a crucial part of the home buying process. Here are some tips for homebuyers in the Bay Area to ensure they find the perfect match:
Look for agents who offer commission rebates: Working with a real estate agent who offers commission rebates can help you save money on your purchase. This can be a significant financial benefit, especially in the high-priced Bay Area market.
Check their experience: Make sure the agent has experience working with homebuyers in the Bay Area and understands the local market dynamics. An experienced agent will be able to guide you through the home buying journey with ease.
Check their reputation: Research the agent’s reputation online and ask for references from past clients. Positive reviews and testimonials can give you confidence in their ability to meet your needs.
Check their communication style: Ensure the agent has a communication style that works for you and that they are responsive to your needs. Good communication is key to a smooth home buying process.
Check their fees: Make sure you understand the agent’s fees and that they are transparent about their pricing and rebate terms. Knowing the costs upfront can help you avoid any surprises later on.
By following these tips, homebuyers in the Bay Area can find a real estate agent who meets their needs and helps them achieve their home buying goals more affordably.
What can buyers do with buyer rebates?
After finally navigating the real estate transactions and buyers close a deal, it’s time to get your commission refund.
New homeowners will get an email congratulating them on completing their home buying journey, asking them where to mail their rebate check. Once that check comes in, there are plenty of ways to put that capital to use.
Considering the high home prices in the Bay Area, many folks will use the funds to start rebuilding their savings. But experienced homebuyers secure in their savings will use the money to remodel kitchens, bathrooms, or bedrooms.
Some house hunters opt to spend their rebate on furnishing their new home, getting a striking couch to complete the indoor-outdoor room.
But the choice is yours. If you wanted to use the money to go on vacation after a homebuying process fraught with bidding wars and tense negotiations, that option is totally on the table.
Are commission rebates legal in the Bay Area?
Uninformed agents will tell buyers that rebates are not legal as it is a form of payment to an unlicensed person without a real estate license. But since the buyer is party to the transaction, they are legally allowed to get money back from their broker on the purchase. In fact, commission rebates are legal in 40 states, including California.
The Department of Justice encourages commission rebates to promote competition and innovation in the real estate market. Yet while the practice is legal, some folks worry about the taxation involved in a refund.
First and foremost, all buyers should consult with their accountant before purchasing a home. Agents are not qualified to provide tax advice. But the IRS has written guidance on commission rebates, noting that rebates are a reduction in the cost basis of the property, meaning that buyers do not need a 1099 from Prevu after closing on their home and getting a rebate check.
Interested in buying a home in the Bay Area? Browse listings in your favorite town and see how much you can save with Prevu’s Smart Buyer Rebate.
Prevu Real Estate, Inc. is a licensed real estate broker in California, license number 02134758.
