How the 1% Cash Back Rebate Actually Works When You Buy a Home

The seller pays our 2.5% commission. We keep 1.5% to run our brokerage — and return the rest to you at closing. Here's exactly how it works, step by step.

The simple version first

In California, the seller typically pays both real estate agents — their own listing agent and the buyer's agent. That buyer agent commission is usually 2.5% of the purchase price.

Portfolio Home Realty is your buyer's agent. We collect that 2.5%. We keep 1.5% to run our brokerage and pay our agents. The remaining 1% goes back to you at closing — as cash.

That's it. No tricks. No gimmicks. No service trade-offs.

The math on a real purchase

Let's use a $1,200,000 home in Irvine as an example:

• Seller pays buyer agent commission: $30,000 (2.5%)
• Portfolio Home Realty retains: $18,000 (1.5%)
• You receive at closing: $12,000 (1%)

You didn't pay anything extra. The seller's commission structure didn't change. You simply chose an agent who shares their commission with you.

Three ways buyers use their rebate

Option 1 — Cash at closing. The most common choice. You receive the funds directly at close of escrow — either as a check or wire to your account.

Option 2 — Boost your offer. In competitive markets like Newport Beach or Beverly Hills, you can apply your rebate to increase your offer price without spending extra. A $24,500 rebate on a $2.45M home can mean the difference between winning and losing a bidding war.

Option 3 — Buy down your rate. Use the rebate as a rate buydown to reduce your monthly mortgage payment. On a 30-year loan, even a 0.25% rate reduction saves significantly over time.

Does the lender need to approve the rebate?

Most lenders allow buyer rebates — they're legal in California and most states. However, rules vary by loan type. We work with your lender upfront to structure the rebate in a compliant way. In some cases, the rebate may be applied toward closing costs instead of cash.

Is the rebate taxable?

Per IRS guidance, buyer rebates are generally treated as a purchase price reduction — not income — and are not typically reported as taxable. Confirm with your CPA, since every situation is different.

Ready to calculate your rebate?

Enter your target purchase price in our rebate calculator to see exactly what you'd receive. Or talk to an agent — we'll walk you through the math for your specific situation.