My real estate professional is offering a rebate if we I work with them to buy a home. Is that allowed?

Ontario buyers have a lot of choice when they look for representation, particularly in larger real estate markets. To stand out from the crowd, some brokers and salespersons may offer a commission rebate to their clients. They can do that, as long as they follow certain rules.

There’s no denying that the offer of a rebate may influence your decision on who to work with, but it shouldn’t be the only factor. It’s always a good idea to meet with at least a few different real estate professionals before you select one. Asking friends or family for recommendations is a good way to identify candidates.

When you interview the candidates, ask about the services they will provide, their experience, the types of properties they typically work with, and which areas they are familiar with.

It’s also important to clarify and document the commissions or fees that you will be expected to pay, and the services that will be included. Asking for references is a good idea, too.

When you make your final decision, you may certainly make commission rebates a factor. Just be sure that you’ll be working with someone that is right for you.

I often emphasize that the cheapest deal isn’t necessarily the best deal, and that applies to rebates. Imagine that you’re selecting from three potential candidates. Is it worth choosing the less-than-ideal representative to get a commission rebate when the more suitable candidate could potentially provide you better service, help you find the best home for you and get it at a lower purchase price?

If you do decide to go with a representative that offers a rebate, there are a few things you should know. First of all, always get a commission rebate in writing, as part of the overall services agreement. Read the agreement thoroughly and make sure you understand it before you sign. Just a reminder that the same rule should apply to any other binding contracts you sign.

You should also clarify how the rebate will be paid. Will the brokerage issue you a cheque after closing, or will the individual broker or salesperson issue a cheque directly after they get paid by their brokerage?

It’s also important to note that rebates can have income tax implications. If in doubt, contact Canada Revenue Agency for further guidance.

Finally, you should understand that the payment of a rebate doesn’t change the purchase price of a property. You get some cash back, and there may be discussion of the “net price.” But the actual price of the property doesn’t change. For example, the cost of the land transfer tax will be based on the purchase price and not the purchase price less the rebate.

There’s no denying that rebates can be very attractive. Just be sure that you’re making an informed choice.

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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