Commission Rebates in NYC: What Traditional Real Estate Brokers Aren’t Telling You

Commission Rebates in NYC: What Traditional Real Estate Brokers Aren’t Telling You

Imagine buying your dream apartment in New York City. You worked hard to save up for it, you search online and are assisted by an expert real estate broker to find the perfect place, you complete your purchase, then - SURPRISE - you get a large commission rebate check from your real estate broker! It may sound too good to be true, but it’s the most important thing that traditional real estate brokers aren’t telling you – you can get cash back when buying a property.


Commission Rebate NYC


The Half-Truth of Traditional Real Estate Brokers

There is a half-truth perpetuated by traditional real estate brokers that it is “free” for buyers to be represented when you buy a home or apartment as the buyer’s broker commission is paid for by the seller. This statement is very misleading and the word “free” is intended to distract you from the fact of how much money traditional buyer’s brokers receive. While there is no itemized cost charged to a buyer, if an intermediary like a real estate broker is being paid a fee during your property transaction, it affects your price as a buyer. It begs the question – If your buyer’s broker is getting paid so much money, what if you could receive a commission rebate from your broker?

First, traditional real estate brokers are failing to transparently educate homebuyers on how the economics of commissions work during a transaction and most homebuyers don’t realize how much their buyer’s broker receives for the transaction until they are sitting at the closing table. Second, while it is simplistic to say that a buyer’s broker commission is paid for by the seller, the very existence of this commission affects how a seller sets the price of their property and this ultimately results in a higher property price for buyers.


The Antiquated Approach to Commissions by Traditional Brokers

To better understand the economics of real estate commissions in New York City (NYC), it is best to look at an example. When a traditional real estate broker negotiates a commission, they’re doing so with the seller. The seller typically pays 6% of the purchase price in NYC. If there’s a buyer’s broker involved in the transaction, 3% (or half) of the total commission goes to the seller’s broker, and 3% (the other half) to the buyer’s broker. Then, each allotment of 3% is divided (or split) between the real estate brokerage and the licensed real estate agent.

If this sounds like too many hands involved in a transaction – you are correct! Sellers are paying exorbitant fees, all of these real estate brokerages and agents are receiving large sums of money, and buyers receive no additional financial benefit for all the money they are shelling out when purchasing a home or apartment.


Commission Rebates – A Smart, New-Fashioned Approach

Thankfully, there is a smarter, fairer approach called a commission rebate that enables buyers to get more financially when they buy a home or apartment. The concept is simple. When a homebuyer purchases a property, the buyer’s broker – who typically receives a 3% commission (half of the 6% commission paid by the seller) - gives a portion of that commission back to the homebuyer. In NYC, the concept has not been widely adopted yet. Traditional real estate brokers are stuck in the old way of doing things failing to pass along savings to homebuyers, and the few firms which do provide rebates only give back a measly 0.5% to 1%.


Prevu Smart Buyer™ Rebates – Up to 2% Cash Back

Prevu, a smart online real estate brokerage in NYC, created the Smart Buyer™ Rebate offering an industry-leading buyer commission rebate of up to 2% of your purchase price. The Smart Buyer™ Rebate is straight-forward and transparent - Prevu rebates a set two-thirds of the commission it receives for acting as your real estate broker, and the rebate amount is disclosed prior to making an offer. By combining technology and salaried agents, Prevu has created a team of real estate agents that are more efficient and focused on the experience of buyers, and this allows the company to pass on significant savings to New York homebuyers.

For example, if a homebuyer purchases a NYC apartment with Prevu that is a 6% commission paid for by the seller and split between the seller’s and buyer’s brokers, Prevu provides the homebuyer with a Smart Buyer™ Rebate of 2% of the purchase price. That’s a lot better than the $0 a homebuyer receives working with a traditional real estate broker.


NYC Commission Rebate (Based on $2,125,000 apartment)

  • Purchase Price: $2,125,000
  • Seller's Agent Commission (3% of Purchase Price): $63,750
  • Buyer's Agent Commission (3% of Purchase Price): $63,750
  • Commission Rebate with Prevu :$42,500

Smart Buyer Commission Rebate - NYC Example Visual

Buyer Commission Rebates – Good for Consumers

The concept of buyer commission rebates is a positive for consumers, has been encouraged by the Department of Justice, and is currently legal in 40 US states. The exceptions are Alaska, Oregon, Iowa, Kansas, Oklahoma, Missouri, Mississippi, Louisiana, Alabama, and Tennessee.

In 2015, the Attorney General of the State of New York weighed in on the matter in a letter to the real estate industry encouraging the consumer benefits of commission rebates. “Rebating by real estate brokers can greatly reduce the costs of buying and selling property and even facilitate new and innovative business models,” said Attorney General Schneiderman. “I urge the real estate community to embrace this opportunity to be more competitive, and improve the choices available to New York homeowners. I also encourage buyers and sellers alike to take advantage of your right to bargain with your broker for a lower commission.”

Some homebuyers may choose to go the traditional route, however it’s important that homebuyers are aware that buyer commission rebates exist so they can make an informed decision when selecting a real estate broker. Getting money back from your broker is even better than “free”.


Prevu is the real estate technology company on a mission to save people money when they buy or sell a home. Our industry-leading Smart Buyer™ Rebate makes it possible for homebuyers in NYC to receive a commission rebate of up to 2% of their purchase price with a seamless, end-to-end buying experience and the expert advice of a dedicated, salaried agent. 



Categories: Buyer Prevu

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