Can I get a Real Estate Commission Rebate on a New Build?

Buying a New Build vs a Pre-Existing Property:The process of buying a new build property can be different than buying a pre-existing property.Sometimes, builders will require you to use their own custom paperwork (Deposit Reservation Agreements, Broker Registration Agreements, Purchase and Sales Agreements, etc.)If you're buying a new build, ensure you understand your builder's custom paperwork and what their sales process is.

In today’s competitive real estate market especially in places like metro cities where commissions can significantly inflate costs savvy homebuyers are discovering a smart savings strategy: commission rebates on new builds. This guide dives deep into what commission rebates are, how they work with new construction homes, and how platforms like WithJoy.AI are making it easier than ever to claim what’s yours.

Receiving a Real Estate Commission Rebate on a New Build

If you’re buying a new build home and the builder does not require you to use their own custom paperwork, you should be able to receive a real estate commission rebate from your agent.

Although, there are nine states that do not allow real estate commission rebates which include Alabama, Alaska, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Oregon and Tennessee- so if you’re buying a property in any of these states, you will not be able to receive a real estate commission rebate.

If you’re buying a new build home and the builder does require you to use their own custom paperwork, make sure to ask for that paperwork as early in the sales process as possible.

This gives you and your agent time to review the paperwork and see if there are any restrictions from your agent being able to rebate their commission back to you.

Why Would a Builder Block Your Real Estate Commission Rebate?

There could be myriad of reasons why a builder may not allow your own agent to rebate you their commission. Here are a few examples:

Large builders operating nationwide may include rebate restrictions in their standard paperwork to comply with states where rebates are prohibited, even if you’re buying in a state where rebates are allowed. Builders often have pre-established commission structures and pricing models for their projects. By preventing rebates, they maintain control over the final cost to the buyer and protect their profit margin.

There are less buyers in the market right now across the country (2024 had the lowest amount of home sales since 1995) which makes it harder for builders to sell their new homes. So, some builders may be providing a significant amount of seller credits, which could take up the maximum number of credits (or rebates) that a buyer can receive on a transaction.

• Large builders operating nationwide may include rebate restrictions in their standard paperwork to comply with states where rebates are prohibited, even if you’re buying in a state where rebates are allowed.
• Builders often have pre-established commission structures and pricing models for their projects. By preventing rebates, they maintain control over the final cost to the buyer and protect their profit margin.
• There are less buyers in the market right now across the country (2024 had the lowest amount of home sales since 1995) which makes it harder for builders to sell their new homes. So, some builders may be providing a significant amount of seller credits, which could take up the maximum number of credits (or rebates) that a buyer can receive on a transaction.

What is a Commission Rebate in Real Estate?

A commission rebate sometimes called a real estate rebate, buyer agent rebate, or realtor rebate is a portion of the agent's commission that's returned to the buyer at closing. When a buyer uses an agent to purchase a home, the agent typically earns a 2.5 - 3% commission from the seller. Some agents, especially those focused on buyer-side representation, will give a portion of that commission back to the buyer as a rebate.

Common Terms You’ll Hear:

• Rebate real estate agent: An agent who offers part of their commission back.
• Buyer rebate realtor: A realtor who gives cash back or credits at closing.
• Realtor commission credit to buyer: A commission refund directly applied to the buyer's closing costs.

Why Commission Rebates Work Especially Well on New Builds

New builds unlike existing homes are often sold through the builder’s in-house sales team. But most developers welcome buyer agents and include their commission in the pricing. That’s where a rebate comes in.

Why It Makes Sense:

• No negotiation with seller needed : The commission is baked into the price.
• Builders offer full commissions to keep agents happy.
• Rebates won’t affect your mortgage: They're often applied as closing cost credits.

Example:

Let’s say you buy a $600,000 new construction home:

• Builder offers 3% buyer agent commission = $18,000
• Your agent gives you 1% as a rebate = $6,000 savings

That’s a serious return for simply working with the right agent.

How Much Can You Save with a Commission Rebate?

Depending on your home’s price, rebates can cover:

• Full or partial closing costs
• Buy Down Your Interest Rate
• Or just money back in your pocket

Is it Legal to Get a Commission Rebate?

Yes in most states, real estate commission rebates are perfectly legal and encouraged as a consumer benefit.

States That Allow Commission Rebates:

• New York
• Washington
• California
• Texas
• And 40+ more

In places like New York City or Seattle, where real estate agent fees and broker commissions are notoriously high, rebate-friendly brokerages are gaining popularity fast.

FAQs: Commission Rebates on New Construction

Q: Can I still get a rebate if the builder has their own agent?

A: Yes, as long as you bring your own buyer’s agent who offers rebates and registers with the builder.

Q: Will my mortgage be affected?

A: No, but some lenders apply the rebate as a credit to your closing costs. Always disclose it to your lender early.

In Summary:

If you’re considering buying a new build home and plan to receive a commission rebate from your agent, make sure you speak with the builder about this as early in the sales process as possible.

If you’re interested in receiving a large commission rebate, check out Joy, where we rebate 70% of our commission back to buyers!