Selecting an agent

Now that you have a short list of homes that interest you, it's time to select a discount broker who will let you look inside the houses and represent you if you decide to buy.

But remember--you'll only need a broker if you're interested in homes that are listed with traditional real estate brokerages.  If any homes on your list are "for sale by owner" (FSBO) properties, visit them on your own by calling the owners and scheduling appointments.  Another of my websites,, has a section for buyers that explains how you can capture even more of the commission by visiting FSBO homes on your own.

Discount brokerages

Here are links to several online discounters, along with examples of the buyer rebates (or credits) you could get from them, assuming the seller offers a 3% commission to the buyer's agent:

  • (Northern California only):  All but 1% of the buyer's agent's commission, or $10,000 on a $500,000 house.  SixHomes will unlock up to six homes.  (Disclaimer:  I own this company.)

  • (Bay Area, Boston, L.A., Orange County, San Diego, Seattle, Washington, D.C.): Two-thirds of the commission, or $10,000 on a $500,000 house.  Redfin will unlock the first two homes for free, and subsequent homes for $250 each.

  •  75% of the buyer's agent's commission, or $11,250 on a $500,000 house.  BuySide doesn't unlock doors, but it can arrange for local listing agents to let you inside.

  • (Florida):  A rebate of 1.5% of the sales price assuming a 3% commission, or $7,500 on a $500,000 house.

  •  1% of the sales price or $5,000 on a $500,000 house.

Traditional brokerages

If you're searching in an area that isn't served by discount brokers, try asking a traditional broker for a commission rebate.  Partial rebates on the buyers' agent's commission are quite common, except in a few states* where the National Association of Realtors has bullied legislatures into prohibiting the practice.  

Here's how it's done:  Before you begin working with an agent, call several real estate offices and ask if any would be willing to rebate a share of the commission back to you at close of escrow.  An agent will be more willing to do so if:

  • You are likely to buy a house soon.
  • You've already done some research and have a short list of homes you like.
  • Your price range is high.
  • You can persuade the agent that you won't be a "high maintenance" client.
  • You haven't begun working with another agent. (If you've attended open houses or if another agent has already shown you some homes, your new agent might have to fight over the commission.) 
  • You can persuade the agent that you won't be "unfaithful" by working simultaneously with other agents.

Once you strike a deal with an agent, be sure to get the agreement in writing before you allow that agent to show you any homes.

Agents will sometimes express surprise and indignation when you ask for a buyer rebate.  But it's a common practice. 

Some personal experiences 

It's sometimes hard to find an agent who's willing to go along with the rebate idea.  Many years ago, I found a lot that was listed by a real estate brokerage.  I wanted to make an immediate full-price cash offer on it with no contingencies. 

But first I tried to find a buyers' agent who would agree to rebate part of the commission back to me.  The lot cost about $200,000, so the buyers' agent's commission would come to $6,000, a steep fee for spending just a few hours filling out forms.  I called several different offices to ask if anyone would be willing to accept a 2% ($4,000) commission and rebate the rest ($2,000) back to me. 

No one in town would accept the deal.  Many agents acted as if they'd never heard of the practice before.  Some were a bit curt with me, as if I were asking them to do something unethical.  If I didn't know better, I'd almost suspect that these agents were party to a secret (and illegal) price-fixing agreement!  I finally found an agent in a remote part of the county who was willing to fill out the forms for me.  He ended up making $4,000 for about 5 hours worth of work.

I wanted to make a full-price cash offer with no contingencies on a lot I'd found myself.  I couldn't find an agent in town who was willing to spend a few hours writing up my offer in exchange for a discounted commission of $4,000.  

If you do find an agent willing to work for a discounted commission, get it in writing before you begin working with him or her.  I once got a real estate agent to agree on the phone to rebate back to me any buyer's agent commission in excess of 2%.  She later spent three hours showing us properties.  When we got home, we asked her to make an offer on a house and incorporate language about the commission rebate into the contract.  She phoned back and said she wouldn't give us a rebate and that she thought we'd just talked about a rebate without actually reaching an agreement.

She had us trapped.  We couldn't go to another agent since she had shown us the house first, and therefore may have had a right to a commission from the sale of that house.  She reasoned that if we wanted the house enough, we'd forfeit the commission to her. 

Though we loved the house, we ended up not making an offer on it or on any of the other properties she'd shown us.  We simply refused to deal with her. 

Secret rebates

Some agents prefer to give secret rebates, since they fear retaliation if their brokers or other agents learn of their willingness to offer discounts.  I suspect their fears are well grounded.

Unfortunately, making the rebates secret makes it seem as there's something shameful or unethical about them.  Why would that be?  What ethical principle is violated by an agent who wants to lower prices for buyers?  Isn't competition the American way?

Though I would prefer dealing with agents who are upfront about offering buyer rebates, in some areas you may need to resort to secrecy.  I believe this speaks ill not of the agents who offer rebates to consumers, but of the agents who punish mavericks who break rank.

Useful resources:

Next step:  More research.


*These states ban buyer rebates:  Alaska, Iowa, Kansas, Louisiana, Mississippi, Missouri, New Jersey, New York, Oklahoma, Rhode Island, South Carolina, and West Virginia.  These states have "minimum service requirements" designed to discourage discount real estate services:  Alabama, Florida, Illinois, Iowa, Missouri, Oklahoma, Texas, and Utah.


ŠLori Alden, 2008.  All rights reserved.