Can I Use a Buyer Rebate for Closing Costs? Lender Rules Explained
How lenders treat a commission rebate, and what happens if it’s bigger than your costs.
If you’re financing
Lenders want to know exactly where every dollar at closing comes from. A buyer rebate is treated as a credit to you, and lenders require it to be applied to your closing costs: things like lender fees, title insurance, prepaid taxes and insurance, and escrow deposits.
If your rebate is larger than your closing costs, most lenders won’t allow the difference to be paid out to you. That overage can’t be paid at closing or outside of it. We follow lender and title rules exactly.
If you’re paying cash
No lender, no limit from a lender. Your full rebate is credited to your purchase, reducing the funds you need to bring to closing.
Where it shows up
Your rebate is spelled out on the Commission Disbursement Authorization (CDA) our brokerage sends to the title company before closing. The title company then shows it as a credit on your settlement statement.
Tips to get the most from your rebate
- Tell us your lender early. Some loan programs have their own rules for credits.
- Estimate your closing costs. Your lender’s Loan Estimate lists them. If your rebate may exceed them, talk to your lender about how credits are applied.
- Contact us before you tour or visit a builder, so we can confirm the commission and your projected rebate up front.
Same terms for everyone
Rebate amounts are set by us and applied the same way for every client, so they can’t be negotiated individually. Terms are accurate as of publication but may change, so we’ll confirm the latest details when you first contact us. See the new construction rebate terms or the resale rebate terms.
Common questions
What counts as closing costs?
Common examples include lender fees, title insurance, recording fees, prepaid property taxes and homeowners insurance, and escrow deposits. Your Loan Estimate lists yours.
What happens if my rebate is bigger than my closing costs?
Most lenders won’t allow the overage to be paid to you, and it can’t be paid outside of closing. Talk to your lender early about how credits are applied.
Is the rebate shown on my closing paperwork?
Yes. It’s on the Commission Disbursement Authorization sent to the title company and appears as a credit on your settlement statement.
Questions? A real, licensed Florida agent answers, usually in under 90 minutes.