About the Commission Refund (Broker Credit)
How our client refund works, how it appears in escrow, and key compliance notes.
What it is: When IDEAL Realty represents you and there isn’t a second agent to split the commission, we may share the savings as a commission refund (broker credit) to you.
How it’s shown: The refund is typically listed on the Closing Disclosure (CD)/settlement statement as “Broker Credit to Buyer” (or to Seller) and is applied to your closing costs and/or cash to close, subject to lender approval.
What You Can Expect
- Clear disclosure: The amount/percent and treatment are documented in writing and shown on the CD.
- Paid through escrow: We route the credit through escrow—no “under the table” payments.
- Lender review: If there’s financing, your lender must approve any credits that affect cash-to-close.
Typical Use of Funds
- Apply to recurring/non-recurring closing costs.
- Reduce cash to close (if permitted by program).
- Rarely: issued post-closing only if fully disclosed and allowed by lender/escrow (not common).
Compliance Snapshot
- California DRE: Commission sharing with a principal is permitted when properly disclosed and not a referral kickback.
- RESPA: Prohibits unearned fees/kickbacks; a broker credit to our own client from earned commission is generally permissible.
- No referral tie-ins: We do not condition the refund on using any particular lender, title, or service provider.
Important Notes
- Avoid describing this as “cash back” without clarifying escrow handling.
- Credits must appear on the closing statement; off-statement payments are not allowed.
- Program rules vary—final approval rests with your lender and escrow.
Documentation We Provide
- Short, signed Commission Refund Disclosure (amount/percent, timing, escrow treatment).
- Reference in our Buyer Representation/Listing Agreement, as applicable.
- Copy of escrow instructions and the final Closing Disclosure showing the broker credit.
Questions about your specific loan program or eligibility for credits? We’ll coordinate with your lender and escrow officer to confirm what’s permitted.