Best Guide To Utah Home Buyer Rebates

Utah Home Buyer Rebates

Utah home buyer rebates are a great way to have a local agent represent your best interest while saving on the commission.  

Utah Home Buyer Rebates

Utah home buyer commission rebates are a great way to save money when buying a home.  As a homeowner and full-time discount real estate agent, I recommend using an experienced agent that offers a rebate.  I've been offering agent discounts for 17 years.

This article will show you how commission rebates work, if rebates are legal, what you can use your rebate for, and if rebates are taxable income. 

After reading this article, you will learn how to save your family thousands of dollars when purchasing your next house.

What is a home buyer commission rebate?

A home buyer rebate is the legal sharing of the commission as a gift or inducement from a licensed real estate agent.  

Why agents offer commission rebates?

More Transactions
It's a strange phenomenon.  When you offer better pricing than your competition, your business explodes.  There's no better incentive for a client to hire you over your competitors than free money in the form of a rebate check. Rebates equal more new clients.

Lower Agent Fees Explained

Repeat Business
Once a home buyer works with an experienced realtor who shares their
commission, they tend to call you the next time they're ready to buy or sell real estate. Repeat customers are easier to work with since there's already established trust.  Repeat customers cost very little to maintain the relationship versus acquiring new customers, which is very costly.

Referral Business
Most people love to share their experiences (good or bad) with their friends, family, and coworkers, so rebates and great service typically lead to many referrals from past clients.  Easy money, even if it is considered by most agents to be a dirty discount.

Rebates Make Homes More Affordable
Home buyer rebates make houses more affordable. This is especially helpful in a hot market like 2021, where sellers were unlikely to make any home repairs for the buyer regardless of how significant the issues were.  The rebate provided the buyer with extra cash to make the repairs after closing without losing their dream home.

The Times Have Changed Even If Agent Commissions Haven't

Being An Agent Before The Internet
Before the internet, real estate agents would spend months, sometimes even years working with a single home buyer.  All home listings were printed in a book that agents needed to manually read through, searching for homes that fit their client's home criteria needs.  That is a slow, painful process even if you only have one client, and agents will not be in the industry for very long if they only work with one client. 

Along Came The Internet
The internet delivered all MLS listing data directly to the home buyer's computer or phone through an Internet Data Exchange (IDX). The digital MLS allowed agents to automate the home search and email new home listings to buyers minutes after the home was listed for sale.  

The IDX allowed sites like Zillow, Realtor, and agent and brokerage websites to display every home for sale in Utah.  Buyers suddenly had the freedom to perform home searches without an agent.  These advancements eliminated tedious manual agent tasks and produced educated buyers who require less of their agent's time.

Agent Access To Homes For Sale
In the past, when an agent wanted to show a home, they needed the listing broker to schedule the showing with the seller.  Once the showing date and time were confirmed, the buyer's agent had to drive to the listing broker's office to pick up the key, show the home and then drive back to the listing brokerage to return the key.  This was the process for every home showing. Buyers rarely buy the first house they tour.  The time required to find a buyer a home was immense. 

Electronic Realtor Lock Box

The Lock Box That Changed The Game
The Realtor Supra key box is only accessible to verified real estate agents, appraisers, and inspectors. These key boxes eliminated the need to pick up and drop off the house key to each brokerage for every listing they showed. Now the house key is in the realtor key box located on the property. Since the key box is accessed through an app, the listing agent knows the exact time and day an agent enters their listings. This makes requesting feedback from the showing agent much easier, which benefits the listing agent and the homeowner.  

Scheduling Home Showings Through Technology
Now agents schedule most showings through the Showing Time app.  Many showings are confirmed instantly, if not in minutes. In the past, agents would wait hours, if not days, to confirm a showing.

As far as we're concerned, agents should have been charging 20% commissions before the internet, not 6%. 

The U.S. Government Supports Rebates. 

The U.S. Department of Justice (DOJ) favors legalizing real estate agent commission rebates in all fifty states. The DOJ views a ban on commission rebates as a price-fixing that inflates the price of homes which cost buyers thousands of dollars while minimizing the need for brokerages to compete on price.

Are Utah home buyer commission rebates legal?

Yes, realtor commission rebates in Utah are 100% legal.

However, just because rebates are legal in Utah doesn't mean all (most don't) brokerages allow them.  The agent's brokerage owns all the contracts their agents have with buyers and sellers.  Therefore, the brokerage policy dictates how business is conducted, not the agent.   

Similarly, inducement gifts (rebates) are subject to lender approval. Home loan guidelines vary based on the type of loan the buyer is approved for.  Rebates are prohibited with certain loans, so disclosing the rebate to the underwriter is required.

Where does it say in Utah law the rebates are legal?
Rebates are classified as an inducement gift.  

See Utah Administrative Code R162-2f-401l.

Utah Administrative Rules Commission Rebate

Discount Utah Home For Sale

Discount Home Search

Receive a commission rebate.  

Use our partner site to search for homes and save the commission.

When do I get the rebate?

That depends on the brokerage offering the rebate (inducement gift).  

Rebate At Closing
If your agent's brokerage offers rebates at closing, the rebate must be listed on the Settlement statement.

HUD's RESPA Rules & Guidelines.

Your rebate must be listed as a credit to the buyer on lines 204-209 on the Settlement statement.

The brokerage and agent offering the credit must also be disclosed on the Settlement statement.

RESPA Rebate Rules

Cash Back After Closing
Some brokerages offer the home buyer rebate after closing in the form of a check from the brokerage, not the buyer's agent.  Buyers receiving cash back outside of closing still need to disclose the rebate to the underwriter and comply with any loan guidelines that apply to the loan the buyer is approved for.  

Home buyer commission rebate calculator
We rebate half (1.5%*) of the commission to our Utah home buyers.  

How do commission rebates work? 

The seller offers to pay a 3% buyer's agent commission (BAC) which is advertised across the Multiple Listing Service (MLS) to participating brokers and agents.  The real estate agent representing the buyer in the home sale will earn 3% of the purchase price.  However, the commission rebate can not come directly from the agent. That would be illegal sharing of commissions. The brokerage, not the agent, must pay the gift from commissions. 

How Commission Rebates Work

If the final sale price is $600,000, the agent would earn $18,000 minus any broker commission splits.  To simplify the math, we'll assume the brokerage doesn't charge the agent fees. The brokerage would pay the buyer's agent $9,000 and rebate the other $9,000 to the home buyer.

Are rebates guaranteed?
No.  Brokerage policies and loan guidelines apply.  Make sure your agent confirms their brokerage will allow the agent to rebate a portion of the commission.

How much are Realtor commissions in Utah?

Real estate commissions are not fixed.  Each brokerage and agent have their percentage or flat fee they charge.  

However, it is generally accepted that commissions are six percent (6%) of the real estate sale price.

Don't Pay 6% Commissions

Commission Rebate Agent Utah
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Aaron Peters is the creator of  Aaron has sold over $150,000,000 in Utah real estate and has over 110 five-star Google reviews.  
Lower Commissions. More Experience.

Home Builder Commission Rebates

If a buyer visits a builder's model home without an agent, they may lose out on the rebate.  Most builders require the agent to accompany the model home with the buyer they represent, or the buyer must be prepared to register their agent with the builder's listing agent. 

Failure to register your agent could prevent you from having an agent represent you and ultimately lose the commission rebate.  

Suppose you plan to visit a builder's model home and do not already have an agent representing you protect yourself by registering me as your agent. I rebate up to half of my commission to home buyers. Buy a new home and receive money back!


Aaron Peters
NetLogix Realty
License #

What Can I Use My Commission Rebate For?

It's your money.  You can do anything you want with your rebate.  

Home buyer rebates can be applied towards closing costs, repairs (after closing), moving expenses, new furniture, pad your savings account (boring!) or take your family on an all-inclusive cruise! 

Commission rebate cruise

Can rebates be applied toward the buyer's closing costs?
Yes, rebates can be used to cover the closing cost on the Settlement statement.  Closing costs include mortgage buy-down rates, appraisal fees, HOA transfer fees, title insurance, etc.

Can rebates be applied toward the buyer's down payment?
No rebates can not be applied toward the buyer's down payment.  Home buyers can receive a gift for the down payment from family members or friends. 

Can I use the rebate to reduce the purchase price?
Yes. The agent should negotiate the best price possible upfront.  

Once under contract, the buyer's agent can request their portion of the commission be reduced, and the same amount of the commission reduction reduces the purchase price.  

There is no way to guarantee the price will be reduced since changing the buyer's agent commission (BAC) amount offered on the MLS requires the listing principal broker, buyer's principal broker, and seller to agree to the price reduction in writing on the Escrow Instructions Form.  

Does the sellers need to approve the rebate?
No, the buyer's agent does not need the seller's approval to offer a gift from their commission.

Are Rebates Taxable Income?

Let's start by saying we are not accountants, and you should definitely consult with your accountant.  

Are Commission Rebates Taxable

The IRS has stated that rebates are an adjustment to the purchase price.  Real estate commissions are baked into a home's purchase price, increasing home prices everywhere. Home buyer commission rebates are the buyer's hard-earned money being returned to them by their agent.

Negotiate A Rebate With A Top-Producing Agent.

Experienced agents are unlikely to cut their commission. Why try negotiating with a full-price agent for lower commissions when I am a top-producing Utah real estate agent that makes it my business to offer rebates?

Out of nearly 20,000 real estate agents in Utah, I was a top 500 producing agent in 2018, 2019, 2020, 2021, and 2022.

Why use a buyer’s agent?

Working with a buyer's agent provides the buyer with many benefits.

Access to the Multiple Listing Service (MLS).
Yes, everyone with a smartphone or computer can search for their next home without a real estate agent.  About a decade ago, Multiple Listing Services (MLS) across the country started sharing all homes for sale through Internet Data Exchanges (IDX) to any website willing to pay for the listing feed.  Thousands of agent and brokerage websites and sites like Zillow or display every home for sale in Utah.  

However, real estate agents have additional information like the past sale price not available on public websites.  Utah is a non-disclosure state, meaning the only way to know the exact price a home sold for is by working directly with the agents that have access to that information.

Experienced Matters
Agents tour hundreds, even thousands, of homes a year, which means they have a finger on the market's pulse.  They know how to structure purchase offers to put the buyer in the best position to get their offer accepted.  It's up to the buyer to take their agent's suggestions.  Some buyers find this to be a difficult. 

Touring homes
Access to homes online may have become easier, but once you find a home online, you still need to access the actual home to see if it's as nice as the professional photographer makes it appear on a computer screen. Many buyers believe they'll go directly to the listing agent.  This may work occasionally, but the listing agent is often too busy with their clients to take time out of their busy schedule for a stranger requesting a showing.  Many agents make it their policy NOT to show their listings.

Call me, and I will provide you with past sales data to make an informed offer, schedule home tours, and rebate 50% of my commission back to you.  

Do Agents Offer Rebates to sellers?

No agents do not offer rebates to sellers.  The seller pays the listing agent and buyer's agent commissions. A rebate to the seller would be their listing agent gifting the seller's money back to them after closing.  

Instead of offering a rebate to the seller, the listing agent can discount the listing agent commission the seller will be responsible for paying at closing.

What type of homes qualifies for rebates?

I offer commission rebates on single-family residences, condos, townhomes, investment properties, and vacant land.

Buy a home get a commission rebate

This post is intended to be the most complete guide on Utah home buyer rebates. Now you should know how to buy your next piece of real estate without paying three percent to the buyer's agent. 

Stealing our content is like trying to steal candy from a baby...except in this case, the baby is a team of highly trained legal eagles, and the candy is a lawsuit.

Aaron Peters Discount Agent

Aaron Peters

Discount Agent Assistant

My Assistant Toeby

My name is Aaron Peters. I'm a full-time discount real estate agent in Utah and the creator of Thank you for taking time out of your busy day to read this blog post.  I'm always open to suggestions from readers.

Toeby(a.k.a Toesy) was born with only three toes on his front left paw. Luckily for him, his only job requirement as my assistant is to nap and remind me that life isn't about sitting at my desk staring at a computer all day. Who's a good boy?

Contact me at 801.243.8900 If you own a company and would like to participate in an interview that is helpful to readers.

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