Commission Rebates in Miami - What You Need to Know

Few real estate markets in the world can compare to Miami.

Miami can be your solution to blending work and play with almost no effort, but then there’s the question of actually buying a home. The luxurious condos of Bal Harbor and the bewitching Mediterranean-style estates of Key Biscayne don’t come cheap.

So what can you do to make the home purchase more manageable?

Thanks to modern and evolving real estate practices, there is an answer. Savvy Miami buyers have unlocked thousands of dollars in savings by utilizing a simple real estate tool: commission rebates.

What is a commission rebate in Miami?

Simply put, a commission rebate, also known as a home buyer rebate or a commission refund, is a portion of the commission a real estate agent earns given back to the buyer upon closing. 

Designed to modernize dusty, traditional real estate practices, commission rebates are a lot more than just checks for extra money.

A buyer commission rebate has a three-pronged effect. If you work with a brokerage like Prevu that specializes in homebuyer rebates, you can have an estimate of your rebate before you commit to the purchase. That means you’ll have a good idea of how much you can expect to save once you close. 

With that knowledge, you increase your purchasing power and confidence when making an offer, plan your budget more effectively based on what you can save, and, ultimately, enjoy and utilize your savings. 

Prevu currently offers the largest commission rebate in Florida, allowing homebuyers to save thousands on their purchase.

How does a commission rebate work?

In many traditional real estate transactions, the seller pays their listing agent a 6% commission upon a successful sale. That commission is then typically split with the broker representing the buyer. So while both agents walk away with attractive earnings, the buyer is shelling out all the money. 

Modern brokerages like Prevu employ commission rebates to tip the scales in the buyers’ favor.

Buyers can partner with a Prevu agent in their homebuying journey. That agent accompanies you throughout every transaction step, whether drawing up a compelling offer, negotiating a better price, or handling the complicated paperwork.

Once you close on a home, Prevu gives you a portion of the commission via the company’s Smart Buyer Rebate.

Commission rebate - Miami example ($1,150,000 home)

• Purchase price: $1,150,000
• Seller’s Agent Commission (3% of sale price): $34,500
• Buyer’s Agent Commission (3% of sale price): $34,500
• Homebuyer rebate: $11,500

Working with Miami agents that offer rebates

The idea that a buyer doesn’t pay anything for a real estate commission is a misconception. 

While you won’t see "agent commission" as a line item for on the closing disclosure for a buyer, the seller usually factors those costs into the price when listing their home for sale.

How do you fix that? Working with a buyer’s broker that offers commission rebates and helps you save money.

Prevu focuses on combining the reward of a rebate with a full-service online brokerage to modernize the homebuying process. 

Buyers who work with Prevu immediately gain access to its digital homebuying platform. They can browse listings in Miami based on specific criteria, from the number of bedrooms and bathrooms to whether the house has a pool.

Each listing on Prevu’s platform transparently shares the potential commission rebate the buyer can expect. The buyer can then easily connect with a local Prevu agent and discuss the details of the home. From there, they can schedule a property tour with the click of a button, and their dedicated Prevu agent will accompany them on the tour, ensuring no detail is overlooked.

This online collaboration between buyer and agent continues until closing, culminating in the buyer holding the keys to their Miami home and a rebate check on the way.

The significant savings from a rebate can play a vital role in offsetting expensive closing costs, replenishing savings, or even contributing to furnishing the new home.

Will you have to pay income tax on your commission rebate?

No real estate brokerage is licensed to provide you tax advice, so always reach out to your accountant to review your circumstances.

But to shed light on the issue, the IRS released a letter in 2007 concerning rebates and whether they’re taxable as ordinary income. According to the letter, commission rebates can be seen as an adjustment in a homebuyer’s cost basis.

Because of this, a real estate brokerage is not required to provide a 1099 form to buyers when issuing them a rebate. 

Buying a home in Miami? Browse listings and see how much you can save with Prevu.