Everything Texas Home Buyers Ask About Commission Rebates

No. The rebate comes entirely from the buyer's agent commission paid by the seller (or builder). You pay nothing out of pocket to receive it.

The commission structure is already built into the home's price. The seller pays a total commission that includes the buyer's agent side. Our rebate simply redirects a portion of what would have stayed with the agent back to you. The seller's proceeds are not affected, and you're not paying an additional fee.

Commission Cash Back is a TREC-licensed Texas real estate brokerage built specifically around buyer commission rebates. Where a traditional agent provides the same services and keeps 100% of the commission, we provide full buyer representation and return up to 70% of our commission to you at closing.

The service is the same: we handle showings, offer negotiations, contract management, builder registration, and closing coordination. The difference is what happens to the commission.

Both. Commission rebates apply to new construction homes and resale homes throughout Texas. The rebate amount is calculated the same way regardless of property type — it's based on the buyer's agent commission paid at closing.

New construction is especially lucrative because large builders consistently pay 3% commissions, and the homes are often priced in the $350K–$700K range. But resale homes in Houston, San Antonio, Austin, DFW, and surrounding suburbs are equally eligible.

The rebate is processed through the title company and reflected on your Closing Disclosure (CD) as a buyer credit. You don't receive a separate check — the credit reduces the amount of cash you need to bring to closing.

If your closing costs are fully covered by the credit and there's still a remaining balance, your lender will determine how the remainder is applied (typically as a loan principal reduction). Cash-back beyond approved closing cost limits is not permitted by most lenders.

Registration is free with zero commitment. You can register, explore the program, and talk to our team without signing anything binding. However, for new construction homes, timing matters: most builders require that your buyer's agent be registered before your first model home visit. Walking in unregistered with a builder can permanently forfeit your rebate eligibility with that builder.

Registering early — before you visit any model home or begin serious shopping — is the single most important step to protecting your rebate.

Yes — buyer commission rebates are explicitly legal in Texas. The Texas Real Estate Commission (TREC) permits licensed brokers to share a portion of their commission with their buyer clients. This is not a gray area or a loophole; it's written into Texas real estate law.

Three separate authorities have affirmed this:

• TREC — Explicitly allows licensed Texas brokers to rebate commissions to buyers.
• U.S. Department of Justice — Has publicly endorsed buyer rebates as pro-consumer and competition-promoting.
• IRS — Classifies rebates as a reduction to the purchase price, not as income (IRS Private Letter Ruling 202047002).

No — the rebate is not taxable income. The IRS treats buyer commission rebates as a reduction in the purchase price of the home, not as earnings. This is confirmed in IRS Private Letter Ruling 202047002 and IRS Publications 525 and 530.

What this means practically:

• You do not owe federal income tax on your rebate.
• You should not receive a 1099-MISC for a properly handled rebate. If you do, it was issued in error.
• You will need to reduce your home's cost basis by the rebate amount. This may affect capital gains calculations when you eventually sell — but only then.

We recommend consulting your tax advisor for specifics to your situation. But for the vast majority of Texas home buyers, the rebate is money kept — not money taxed.

This is a common misconception — and one that financially benefits traditional agents who repeat it. Rebates are illegal in a small number of states (Alabama, Alaska, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee). Texas is not on that list.

Some agents confuse state laws or repeat outdated information. Others have an obvious incentive to discourage rebate brokerages. The legal standing in Texas is unambiguous: TREC permits it, the DOJ supports it, and buyers across Texas have been receiving rebates for years.

The rebate is disclosed on the Closing Disclosure, which all parties sign. Sellers are technically aware it's there. In practice, sellers rarely care because the rebate comes out of the buyer's agent commission — it does not reduce the seller's net proceeds in any way.

The seller pays the agreed-upon total commission regardless. Whether the buyer's agent keeps it or shares it with the buyer is between the brokerage and the buyer.

Yes, but in a minor and often inconsequential way. Because the IRS treats the rebate as a purchase price reduction, it lowers your home's cost basis by the rebate amount. When you eventually sell, a lower cost basis means a slightly larger calculated gain.

However, most homeowners are protected by the Section 121 exclusion — up to $250,000 in capital gains ($500,000 for married couples) is excluded from federal tax when selling a primary residence you've lived in for 2 of the past 5 years. For the vast majority of Texas home buyers, the basis adjustment has zero real-world tax impact.

Consult a tax professional for situations involving investment properties or large gains.

Yes. The majority of major builders in Texas — D.R. Horton, Lennar, Perry Homes, Highland Homes, Meritage, Taylor Morrison, KB Home, and others — pay a buyer's agent commission of 2.5–3% on new home purchases. This is built into their pricing model.

If you buy directly from the builder without a buyer's agent, the builder typically keeps that commission rather than passing the savings to you. Bringing Commission Cash Back as your buyer's agent means we earn that commission — and return 70% of it to you.

Yes — and this is one of the most valuable combinations in Texas home buying. Builder incentives (closing cost credits, interest rate buy-downs, appliance packages, design center allowances) come from the builder's budget. Your commission rebate comes from the buyer's agent commission. They are separate line items and can both apply to your transaction.

A typical stacking scenario in DFW or Austin:

• Builder incentive: $15,000 in closing cost credits + 4.5% rate buy-down
• Commission Cash Back rebate: $8,400–$12,000
• Total closing-table benefit: $23,000–$27,000

To stack successfully, register your agent with the builder before your first visit and disclose the rebate to your lender early so they can structure the credits correctly.

Builders have a policy called "agent of record" or "broker registration." The first time you walk into a model home and provide your contact information, the builder records whether you had a registered buyer's agent. If you walk in without one, the builder marks you as "self-represented" — and most builders will not honor a later attempt to add a buyer's agent to your account.

This means if you tour a model home before registering with Commission Cash Back, you permanently forfeit your rebate eligibility with that specific builder. There's no workaround once the first visit is logged.

Possibly — it depends on what you did and said on that first visit. Contact us and describe your situation. A few factors that matter:

• Did you fill out a registration card or provide contact info at the sales office?
• Did the sales agent ask if you were working with a buyer's agent?
• Did you indicate you were self-represented?

If you only drove through or walked the outside of the property without interacting with the sales staff, you may still be eligible. If you registered with the builder as self-represented, the chance of recovering rebate eligibility with that specific builder is low — but rebate eligibility for other builders you haven't visited yet is fully intact.

No. The builder's sales agent represents the builder — not you. Their job is to sell homes at the best price and terms for the builder. They may be friendly and helpful, but their fiduciary duty runs to their employer, not to you.

Commission Cash Back represents you: we review the builder's contract, flag unfavorable terms, negotiate upgrades and incentives on your behalf, coordinate your inspections, and advocate for your interests through closing.

No. Builders set their pricing and incentives for buyers independent of whether the buyer's agent rebates their commission. The commission we receive is paid by the builder regardless — it doesn't come from a pool shared with buyer incentives.

Builders do not reduce their buyer incentives because you're using a rebate agent. The incentive programs (rate buy-downs, closing cost credits) are separate line items in the builder's budget from the agent commission line. You can and regularly do receive both.

The formula: (Purchase Price × Builder/Seller Commission %) × 70%

Example on a $500,000 home with a 3% buyer's agent commission:

• Total buyer's agent commission: $500,000 × 3% = $15,000
• Your rebate (70%): $15,000 × 70% = $10,500
• Commission Cash Back retains: $4,500

The exact commission percentage varies by seller or builder. Most Texas builders pay 3%. Resale transactions typically pay 2.5–3%. We confirm the exact commission before your offer is submitted so you know your exact rebate in advance.

Our Texas buyers average $6,700+ back at closing. Actual amounts vary significantly by city and home price:

• Houston: Median ~$335K → avg. rebate $7,000+
• San Antonio: Median ~$310K → avg. rebate $5,800–$7,000
• Austin: Median ~$435K → avg. rebate $8,500–$12,000
• Dallas-Fort Worth: Median ~$355K → avg. rebate $7,200+
• Boerne / Hill Country: Median ~$500K+ → avg. rebate $10,500+

Buyers purchasing in new construction communities in Celina, Georgetown, Boerne, or The Woodlands — where homes routinely close at $500K–$700K+ — often receive $12,000–$18,000+.

The rebate credit can be applied to any closing cost line item. Most buyers use it for:

• Closing costs (title, escrow, recording fees, prepaid insurance)
• Mortgage points / rate buy-down — locking in a lower interest rate permanently
• Prepaid reserves — property taxes, HOA dues, homeowner's insurance escrow
• Principal reduction — if credits exceed closing costs, your loan balance may be reduced

Common uses buyers don't always think of: using the rebate to buy down their mortgage rate by 0.5–1% can save significantly more over the life of a 30-year loan than the rebate amount itself.

There is no minimum purchase price requirement from our side — the rebate is calculated proportionally regardless of price. However, very low purchase prices may produce rebate amounts that don't significantly move the needle after transaction costs.

Our program is especially effective for buyers in the $300,000–$700,000+ range, which covers the majority of new construction in Texas metros and the Hill Country corridor.

No — the rebate cannot be used to fund your down payment. Fannie Mae, Freddie Mac, FHA, and VA guidelines prohibit buyer's agent commission credits from being counted toward the down payment or minimum borrower contribution requirements. This is a federal lending rule, not a Commission Cash Back policy.

The rebate can cover closing costs, prepaids, and reserves — which effectively frees up your own cash. Many buyers find that having their closing costs covered by the rebate allows them to put more toward their down payment from their own savings.

Yes. Your lender must be aware of and approve the rebate before closing. This is not optional — failing to disclose a buyer's agent credit to your lender could be considered mortgage fraud. Commission Cash Back ensures full disclosure on every transaction.

In practice, most conventional lenders are familiar with buyer agent credits and process them routinely. The rebate is structured as an "interested party contribution" (IPC) and appears on the Closing Disclosure as a seller credit or buyer's agent credit, depending on how it's structured.

The rebate itself does not affect your loan approval — your creditworthiness, income, and debt-to-income ratio are what drive approval. However, lenders do apply limits on how much in total credits you can receive (called Interested Party Contribution limits, or IPCs).

IPC limits by loan type:

• Conventional (5%–24.99% down): Max 3% of purchase price in total credits
• Conventional (25%+ down): Max 9% of purchase price in total credits
• FHA: Max 6% of purchase price in total credits
• VA: Subject to lender-specific rules — typically allowed

If the combined rebate + any seller concessions exceed your IPC limit, the excess credit is applied as a loan principal reduction rather than cash back.

FHA: Yes. Rebates are permitted on FHA loans and can be applied toward closing costs within FHA's 6% IPC limit. The rebate cannot be used as cash back or toward the required minimum down payment (3.5%).

VA: Generally yes, but subject to your specific lender's guidelines and VA residual income requirements. VA loans have unique rules — confirm with your lender before assuming the full rebate applies. Commission Cash Back works with VA borrowers regularly and can help navigate this.

In both cases, early disclosure to your lender is essential so the rebate is structured correctly on your Loan Estimate and Closing Disclosure.

The rebate is structured as a closing cost credit, not as a change to the purchase price — so it typically does not affect your LTV ratio. Your loan amount stays the same; the rebate reduces the cash you need to bring to closing.

In some cases where credits exceed closing costs and lenders apply the excess as a principal reduction, your loan amount would decrease slightly — which actually improves your LTV. This is a favorable outcome. Your lender will clarify how the specific amounts apply to your transaction.

Yes — regardless of which lender you use. If you go with the builder's preferred lender, disclose the rebate immediately. Builder lenders are experienced with rebate credits because they process them regularly with builder communities.

Note: You are never required to use the builder's preferred lender. Builders often offer incentive credits for using their lender — compare those incentives against the rate and terms your own lender can offer. Sometimes the builder's preferred lender wins on total value; sometimes shopping independently wins. Commission Cash Back can help you evaluate this tradeoff.

Register at commissioncashback.com. It takes under two minutes and requires no commitment. After registering:

• We contact you to understand your search — city, budget, new construction vs. resale, timeline.
• For new construction: we formally register you with the specific builders you're considering, which locks in your rebate eligibility before your first visit.
• For resale: we connect you with our agent network for showings and representation.
• We're involved through offer, negotiation, contract, inspection, and closing.
• At closing, your rebate appears on the Closing Disclosure as a credit.

The rebate is credited at closing — the same day you take possession of your home. It appears on your Closing Disclosure as a buyer credit, reducing the cash you need to bring to the closing table. It's not paid before closing, and it's not paid as a check after closing. It flows through the title company as part of the closing settlement.

A buyer representation agreement is required under Texas law before an agent can submit an offer on your behalf. This is standard for all buyer's agents in Texas, not unique to Commission Cash Back. The agreement specifies our commission structure and your rebate terms in writing.

You are not required to sign anything to register or explore our program. The representation agreement is signed when you're ready to move forward on a specific property or builder community.

This is rare for major Texas builders, but it does happen occasionally — particularly with some Lennar communities that have moved to zero or reduced buyer agent commissions. If a builder pays no buyer's agent commission, there is no commission to rebate.

In practice, most Texas builders pay 2.5–3%. We verify commission rates for specific communities before you invest time in visits or make offers. If a builder has reduced their commission, we'll tell you upfront and explain what rebate (if any) is available so you can make an informed decision.

If a transaction doesn't close, no commission is earned — by us or anyone else. There is no rebate on a deal that doesn't close, and you owe us nothing. Commission Cash Back is paid only at closing, only when you successfully purchase a home.

If you start over with a different property or builder, your registration and rebate eligibility continue. You do not need to re-register from scratch.

Yes. Commission Cash Back is a fully licensed Texas brokerage. We provide complete buyer representation including showings coordination, offer strategy and writing, negotiation, contract management, builder advocacy, inspection coordination, and closing support.

The rebate model works because our volume and efficiency — not because we cut corners on service. Buyers who purchase new construction with a builder they've already selected actually need less in-person showing time and more transactional expertise, which aligns perfectly with our model.

This is exactly when Commission Cash Back is most valuable. You've done the legwork of finding the home or community. You don't need an agent to help you search — you need an agent to represent your interests in the transaction and to unlock the commission that's being paid regardless.

A licensed buyer's agent at closing protects you in ways the builder's sales agent never will: reviewing the purchase contract, pushing back on unfavorable terms, coordinating your third-party inspection, and ensuring your interests are represented through final walkthrough. And you get $6,000–$15,000 back at closing for having that protection.

Yes — and out-of-state buyers are some of our most common clients. Many buyers relocating to Texas from California, New York, Illinois, or other high-cost states use Commission Cash Back to offset moving costs or reduce their cash-to-close. We coordinate remote showings, virtual tours, and builder registrations. For new construction, many transactions can be handled almost entirely remotely since the home is built to spec.

We currently serve buyers throughout the four major Texas metros and their surrounding growth corridors:

• Houston — including Katy, The Woodlands, Sugar Land, Cypress, Pearland, Conroe
• San Antonio — including Boerne, New Braunfels, Schertz, Stone Oak, Helotes (our headquarters area)
• Austin — including Kyle, Buda, Round Rock, Cedar Park, Georgetown, Leander, Hutto, Pflugerville
• Dallas-Fort Worth — including Frisco, Celina, Prosper, McKinney, Fort Worth, Mansfield, Fate

Not sure if your target area is covered? View all Texas markets or contact us directly.