Most listings still offer a buyer-broker fee, commonly 2 to 3 percent of the price. With a traditional agent, all of it goes to the agent. With a rebate, part of it comes back to you.
How Arrivva's rebate works
Buyers pay Arrivva $9,750 flat. When the seller offers a buyer-broker fee, we keep $9,750 and everything above that comes back to you at closing.
| Purchase price | 2.5% buyer-broker fee | Arrivva fee | Your rebate |
|---|---|---|---|
| $800,000 | $20,000 | $9,750 | $10,250 |
| $1,200,000 | $30,000 | $9,750 | $20,250 |
| $1,500,000 | $37,500 | $9,750 | $27,750 |
| $2,000,000 | $50,000 | $9,750 | $40,250 |
Rebates are legal in California and Washington, where we represent buyers. You can see what we've returned to clients on our results page.
Five ways to use it
- Strengthen your offer. Credit some or all of it back to the seller. Your offer looks better to them without raising your real cost.
- Cover closing costs. Apply it to your closing costs, up to your lender's limits.
- Buy down your rate. Use it toward points to lower your mortgage rate, if your lender allows. More on that in Mortgage Points and ARMs.
- Lower the price. On a cash purchase, the price simply drops by the rebate amount.
- Take it as cash. We wire it to you after closing.
Why it matters more than it sounds
- It changes the incentive. A commission agent is paid more when you pay more. We're paid the same at any price, so negotiating the price down never costs us anything.
- It's real money at Bay Area and Southern California prices. On a $1.5 million home, a 2.5 percent buyer-broker fee is $37,500. Most of that can come back to you.
- It gives you room in a bidding war. Crediting part of the rebate to the seller lets you compete without stretching your budget.
What to know before you count on it
- Lenders set limits. Credits toward closing costs are capped by loan program, and a lender may reduce the credit if it exceeds your actual costs. We plan this with you before you write the offer.
- Taxes. A rebate received at closing is generally treated as a reduction of your purchase price, not taxable income. Confirm with your tax advisor.
- It depends on the buyer-broker fee. Since the NAR settlement, sellers aren't required to offer one. When they don't, we walk you through your options before you offer, including asking for it in your terms.
The bottom line
You pay for representation either way. A rebate means you pay a set price for it and keep the difference.