How do real estate agent rebate offers work?

Some real estate agents offer commission rebates to draw in prospective buyers and sellers as clients. If done properly, this sales tactic can result in a “win-win” for both parties – the agent who is able to drum up new business, and the client who is able to save or recoup some money.

If you are thinking about seeking the services of an agent who is offering a rebate, be mindful of a few things.

When rebates are offered, the details should be reviewed and approved by the broker of record as all trades are made in the name of the brokerage. Agents have a duty to ensure that the promotion, documentation and delivery of the rebate comply with the law.

Before moving forward, ask the agent to specify the details of the rebate, including all terms and conditions. This will help you make an informed choice and avoid any misunderstandings. Here are some questions to get the conversation started.

    • What are the exact terms of the rebate? Make sure everyone is clear on the exact amount you will receive and how it will be calculated. Is it a fixed dollar amount or a percentage?
    • What has to happen for you to be eligible for the rebate?
    • When will you receive the money?
    • Whom should you expect to receive the rebate from – the brokerage or your agent? How will it be sent to you?

As well, the details of the rebate should be put in writing and signed by you and the agent of the brokerage representing you. This can be included as part of your representation agreement, which is a legally binding contract.

Before you sign anything, make sure you thoroughly review the paperwork. I would recommend consulting a lawyer who is insured to practice real estate law, especially if you are unclear about any of the details.

If you encounter any disagreements after having everything documented, there are ways to mitigate them.

While resolving any issues in a cordial manner directly with the agent is the ideal scenario, if you are unable to do so I suggest you reach out to the broker of record (the manager of the brokerage where the agent is employed). This individual is responsible for making sure employees comply with provincial legislation and the brokerage’s policies. Also, keep in mind that your agreement (whether as a buyer or seller) is between you and the brokerage and not with the agent.

In the event that the matter cannot be amicably resolved, you may have to engage a lawyer or consider launching legal action. An unfulfilled rebate may also be a complaint matter for RECO. Depending on the nature of the situation, RECO may attempt to resolve it through dispute resolution, discipline, or sanction of the agent or brokerage. To learn more about the discipline process, visit RECO’s website at

Last, but not least, remember that there are many other details to consider aside from rebates when conducting a real estate transaction. That is why I always think it’s wise to speak with a few agents before selecting one. It is important that you are comfortable with your agent’s experience, expertise, and services so that you have the support you need.

If you have a question for Joe about the home buying or selling process, please email

This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at, follow on Twitter @RECOhelps or on YouTube at

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