Buyers Guide to Redfin Rebates

What is the Redfin Rebate?

Don’t Forget to Tell Your Lender

Eligibility for the Redfin Rebate

Tax Repercussions of the Redfin Rebate

Alternatives to Redfin Rebates

Richr

Clever Cash Back

REX Real Estate Rebate

Agent Rebates

Frequently Asked Questions (FAQs)

What is the redfin refund?

How does redfin refund work?

Where is the Redfin Refund offered?

Does redfin give the buyer a refund on commission?

How does redfin refund post close?

How much is a Redfin buyer rebate?

How does redfin work for buyer refund?

The Redfin Rebate seems like the perfect solution for any buyer looking for a home. After all, they don’t pay a dime to use an agent and they even get money back. Score! While many rebate programs and cashback services are beneficial, some are far better than others. Just like credit cards and bank accounts, you’ll have to read the fine print to understand exactly what they’re offering and what you qualify for. The buy with Redfin Refund may seem like an attractive incentive – but it’s not everything it’s cracked up to be. Read on to find out everything you need to know about the Redfin Rebate and alternatives that could save you more.

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What is the Redfin Rebate?

After a full redfin refund review, we have the details about exactly what it is – and isn’t! The way the refund works is that you’ll have to work solely with a Redfin buyer’s agent. If there are not any in your service area or the ones that are in your area have their plates full with other clients, you’ll be referred to a partner agent instead. You likely won’t receive a refund if you’re with a partner agent.

In order for you to receive the refund at all, your agent will need to either make 1% of the purchase price or $6,500, whichever is higher. If you calculate this, that means you’ll have to purchase a home with a minimum of $325,000 if the agent’s commission worked out to 2% and $216,666 if they were offered 3%.

Don’t Forget to Tell Your Lender

Before you get too excited about the refund amount, since Redfin offers a rebate, it is subject to lender restrictions. If you were to choose a service, like Richr, that offered cashback instead, you’d be able to skip this stipulation.

The rebate means that technically, the purchase price of the home is lower in the realm of financial requirements. Your lender needs to ensure that they’ll profit enough off the loan and that you’re in line with the loan-to-value ratio (LVT). If you fail to mention this to your lender, you could find yourself in some hot water with a mortgage fraud charge as the absolute worst-case scenario and forfeiting your financing approval.

Eligibility for the Redfin Rebate

While investigating the redfin commission refund review, it isn’t clear what their qualification process involves in any of their online documentation. While we know the eligibility starts at the price point of the home. What we don’t know is other variables, such as the condition of the home. At the very least, you’ll need to ensure that the Redfin buyer’s agent you’re working with will receive, at a minimum, 1% of the purchase price or $6,500, whichever amount is higher.

Tax Repercussions of the Redfin Rebate

If you’re worried about any implications from a redfin refund taxable standpoint, all you need to worry about is your agent making a mistake. Technically, a rebate is not taxable. The IRS observes rebates as a decrease in the home’s cost basis, not income they can tax.

However, your agent can make this a bit more complicated if you receive the wrong form. In some cases, agents issue a 1099-MISC form thinking that the rebate is going to be taxed income. If the IRS receives this, they’ll be expecting payment from you. You’ll have to go through the process of explaining what happened, come up with the paperwork, and prove it was an error.

To avoid that headache altogether, just let your Redfin agent know that they used the wrong form if you come across this.

Alternatives to Redfin Rebates

While any type of rebate or refund is an excellent incentive for buyers, you should take the time to research which one will benefit your current situation. Here are some of the best alternatives if you find that the Redfin Rebate is running a bit short.

Richr

Richr is a digital platform that empowers buyers to purchase their dream home while having everything they need fall under one company’s umbrella. Not only is the up to 2% cashback reward higher than most agencies we’ve seen, but the word cashback here is critical. That means you can wait for the cheque after closing and spend the money any way you want without risking the lender rejecting some extra cash coming your way. A cashback incentive doesn’t affect the purchase price of the home. Therefore your lender won’t need to approve it. But you should always let them know about it, just in case! Richr also offers a one-stop shop for your title, insurance, and financing needs.

Clever Cash Back

Just like Richr, Clever also offers cashback instead of a rebate – however, at a much lower rate. Any home you buy for over $150,000 qualifies for a 0.5% cashback reward if you live in a qualified area and meet their requirements. If the house is only between $50k-$150k, you’ll only receive a flat fee of $250.

REX Real Estate Rebate

REX promotes a rebate incentive of up to 50% of the agent’s commission. However, to be eligible for compensation, a number of restrictions, requirements, and criteria must be met – no surprise there!

To be eligible for a refund, buyers must purchase a home that REX does not list. Furthermore, purchasers are not entitled to half of their agent’s commission in just any transaction. You can only get a maximum of 1% of the home’s selling price.

Rebates are also considered a closing credit, which means they can only be applied to permitted closing costs instead of being used for anything you wish as a cashback option would allow. Don’t bank on any funds for renovations or your next income property when you agree to a rebate.

Agent Rebates

Rebates are legal in 42 states, and the Department of Justice encourages real estate rebates to become a standard offer to help buyers secure a home. Unless you’re in one of the areas that restrict rebates, which includes Alaska, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee, you can ask the agent to rebate part of their commission.

Just keep in mind, unless they’re already offering this, it’s likely they’ll say no. After all, an agent wants to know that their time will be respected without losing any money. These rebates are subject to tight restrictions, such as how you can spend your money. Typically, they are only a credit that can be used to cover closing costs, appraisal fees, escrow fees, etc. However, you can make this option more appealing to your agent if:

• You’re purchasing a home at a higher price point.
• You’re also using that agent to buy and sell.
• The agent is new and just starting their career. You can promise to leave them a review if that helps!

Before agreeing to any rebate or cashback incentive, it’s recommended to check with your lender if it changes anything to do with your loan. While a cashback option is the safest way to ensure you’ll still be approved for financing, it’s better to be safe than sorry when it comes to such a significant investment.

Frequently Asked Questions (FAQs)

What is the redfin refund?

The Redfin Refund is Redfin’s own home buyer rebate program. They use this incentive to attract buyers to purchase their dream home through their services. Redfin cash back does not exist, but instead, they credit buyers on only eligible homes, and that credit is disbursed at closing. If there is any money left over, they claim you may receive a cheque as disbursement of the rest of the funds. However, the details and timing on that are unclear.

How does redfin refund work?

The redfin buyers refund works similarly to other agent commission rebates. Typically, one of Redfin’s buyer agents will receive 2.5-3% of the sale price as part of their split from the 5-6% the seller’s agent received. From that amount, if you qualify, you’ll receive a small sum of the buyer’s agent commission, which is refunded as a credit at closing. If there’s money left over, they claim you may receive a cheque.

Where is the Redfin Refund offered?

When it comes to the redfin buyer refund, the offered locations are limited. Rebates are banned from Alaska, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee on a state level. The complete list of locations is below, and if you don’t see yours listed, you may get referred to a partner agent.

• Asheville
• Albany
• Anchorage
• Atlanta
• Austin
• Birmingham
• Boise
• Boston
• Buffalo
• Charlotte
• Chicago
• Cincinnati
• Cleveland
• Columbus
• Connecticut
• Dallas
• DC
• Delaware
• Denver
• Des Moines
• Detroit
• El Paso
• Flagstaff
• Fort Myers
• Grand Rapids
• Hampton Roads
• Hawaii
• Houston
• Indianapolis
• Inland Empire
• Jacksonville
• Kansas City
• Knoxville
• Lake Tahoe
• Las Vegas
• Little Rock
• Los Angeles
• Louisiana
• Louisville
• Maryland
• Memphis
• Miami
• Minneapolis
• Nashville
• Nebraska
• New Jersey
• New Mexico
• New York City & Long Island
• Northeast Virginia
• Northern New England
• Oklahoma
• Orange County
• Orlando
• Palm Beach
• Palm Springs
• Philadelphia
• Phoenix
• Pittsburgh
• Portland
• Raleigh
• Rhode Island
• Richmond
• Sacramento
• Salt Lake City
• San Antonio
• San Diego
• San Francisco
• Savannah
• Seattle
• South Carolina
• South Texas
• Spokane
• St. Louis
• Tampa
• Tuscan
• Wisconsin

Does redfin give the buyer a refund on commission?

In order for the redfin discount to be applied as a rebate, the redfin buyer’s agent commission must equal at least 1% of the sale price or $6,500, whichever number is more significant. Once this happens, you get to choose if you’ll receive the credit at the closing table and if there is any money left over, you may get a cheque with the remaining balance.

How does redfin refund post close?

Once the Redfin buyer commission refund has been calculated, the buyer must accept the amount to be covered at closing and receive a cheque post close with any leftover cash. After all, you’ll have to pay closing costs anyway, and you may as well keep more of your money than waiting for it to return to you with such a small amount as most of the redfin refund calculator amounts may offer.

How much is a Redfin buyer rebate?

According to the redfin agent rebate on their website, the average is only $1,500 that a buyer may receive as a credit at closing. While it’s typically 0.5% of the purchase price when you’re dealing with a redfin buyer credit, other factors can quickly lower the redfin refund percentage you’ll receive. Factors that go into this include location, price, current market conditions, and more. However, if Redfin agents are available in your marketplace, you’ll be referred to a partner agent, where your redfin commission refund is capped at a $500 flat fee.

How does redfin work for buyer refund?

While you’re browsing Redfin listings, you’ll be able to see an estimate on the amount you’ll receive as a redfin buyer rebate. Keep in mind, this number is not a guarantee. In the fine print on the redfin rebate program, the company notes that the refund amounts must meet their requirements and could fluctuate due to a variety of factors beyond your control.

That means there’s no way to know exactly how much you can count on if you’re buying a home and expecting a redfin discount.

With more buyers in the market desperately trying to find their dream home, agents utilize technology to streamline the process immensely. Since they aren’t working as many hours to drive your offer back and forth, they want to pass on some of those savings to you. However, the best service for the most savings promotes a 2% cashback reward through Richr. Fund your future with smart moves today!