A cash rebate at closing sounds like free money. In Florida it can be legal, but only when it is disclosed to everyone in the deal. The disclosure is the part buyers and lenders most often miss.
The short answer
Florida lets a real estate licensee share part of the commission they earn with a party to the transaction, usually the buyer, as long as the sharing is fully disclosed to all interested parties. The rule is Florida Administrative Code 61J2-10.028, in effect since 1997. Whether any rebate is available on a particular purchase is up to your agent and brokerage, so ask.
Commission is negotiated, not set by law
Florida does not set a commission rate. The Florida Realtors legal guide says it directly: “Compensation is fully negotiable and not set by law.” Your buyer agreement states what the brokerage is paid and how. Any rebate is a portion of that licensee’s own compensation, not an extra charge added to your price. If you are comparing agreements, read our guide to Florida buyer agent agreements and the difference between a transaction broker and a single agent first.
What the rule actually says
The rule has two parts, and they point in opposite directions.
- Hidden payments are a violation. A licensee who receives, or agrees to receive, a kickback or rebate for placing or favoring a business transaction breaks Florida licensing law unless, before that placement, the licensee has fully advised the principal and all affected parties of the facts.
- Disclosed sharing is allowed. Subsection (2) of the rule says: “The sharing of brokerage compensation by a licensee with a party to the real estate transaction with full disclosure to all interested parties is not considered a violation of Chapter 475, Part I, Florida Statutes.”
So the test is not whether money moves. The test is whether everyone who should know, knows, and it is written down.
Who is an “interested party”?
Florida Realtors reads the disclosure requirement broadly. It “should include any person or entity involved in the deal.” Their example is the lender: “the buyer’s lender would need to know about this rebate, as it could impact the lender’s loan calculations.” That is why you should tell your loan officer at the start of the process, not on closing day. A rebate that changes the numbers after the loan was approved is a problem for everyone.
How a credit or payment at closing affects a specific loan type, including the limits that apply to FHA, VA, conventional and USDA loans, is a separate question. Our mortgage-side guide explains seller and lender concession limits by loan type, and your loan officer should confirm how any rebate is treated on your file.
Rebate or kickback: the difference that matters
A rebate is money returned to a party to the deal, disclosed in writing to everyone involved. A kickback is a payment for steering business to someone, such as a lender, title company or inspector, without disclosure. The first is allowed in Florida. The second is a licensing violation, and it can cost the licensee the license. You do not need to know the legal details to protect yourself. You only need to ask the questions below and expect written answers.
Questions to ask in writing before you sign
- Is any part of the commission being returned to me? If so, how much, and when do I receive it?
- Is the rebate written into the buyer agreement, or in a separate written disclosure I can keep?
- Who else receives the disclosure: the seller, my lender, the title company?
- Where will the rebate appear on my closing statement?
- Does my lender need to adjust my loan because of it, and how?
- What happens to the rebate if the deal falls through before closing?
Red flags
- A big number in an ad with no terms. Florida Statute 475.25(1)(c) makes it a violation to advertise property or services “in a manner which is fraudulent, false, deceptive, or misleading in form or content.” An ad that promises cash back with no conditions is a reason to ask for the terms in writing.
- Pressure to keep the rebate quiet from your lender, the seller or the title company.
- A verbal promise only. If it is not in writing and not on the settlement paperwork, you do not have it.
Check the closing paperwork for the rebate
A disclosed rebate should show up in your loan paperwork, not only in a conversation. The Consumer Financial Protection Bureau explains that lenders must give you your Closing Disclosure “three business days before your scheduled closing,” and that is the time to check it. Compare the closing costs and cash to close with your most recent Loan Estimate, and if anything looks different from what you expected, ask why. If a rebate was promised and you do not see it in the figures, that is the moment to ask your agent and lender, in writing, where it went.
Keep the rule of thumb simple: the rebate, the loan estimate and the closing disclosure should tell the same story. If they do not, do not sign until they do. Earnest money is the other place buyers lose track of money, so read our guide to earnest money in Florida, who holds it and when it is refundable before you write the check.
A rebate does not replace the things that protect you
Even when a rebate is disclosed, it does not change your protections. You still need a clear inspection period in the contract, because that is your window to get the home checked and to cancel if the findings are serious. Our inspection team explains how to plan it in their Florida inspection period schedule. You also still need insurance from the day you close. Getting a quote early avoids a last-week scramble, which is why we keep a Florida property insurance quote page for buyers.
For the other side of the bill, read our guide to Florida closing costs, buyer vs. seller, which shows who pays what before any rebate is applied. First-time buyers can start with our first-time home buyer guide for Central Florida.
Frequently asked questions
Is a home buyer rebate legal in Florida?
Yes, when the licensee shares part of their compensation with a party to the transaction and discloses it to all interested parties, as subsection (2) of Rule 61J2-10.028 describes. Undisclosed payments for steering business are not allowed.
Does the seller have to know about my rebate?
The rule requires full disclosure to all interested parties. Florida Realtors notes that this should include any person or entity involved in the deal, so plan on the seller being told as well.
Can a rebate change my mortgage?
It can. Florida Realtors gives the lender’s loan calculations as the example, so tell your loan officer early and ask how it is treated.
Should I rely on a rebate that is only advertised?
No. Get the terms in writing, with the amount, timing and conditions, before you rely on it.
Questions about a specific purchase? Call Tariq AbouAdma at 407-476-6667.
Tariq AbouAdma, Florida Real Estate Broker, BK3375638. Quality Real Estate Services LLC, 336 Wilshire Blvd, Suite 274-229, Casselberry, FL 32707.