When a house sells in Ontario, thousands of dollars in commission changes hands. A cashback realtor gives some of that money back to the buyer. It sounds too good to be true, which is exactly why buyers ask us whether it is a gimmick, whether it is even legal, and what the catch is.

Here is a straight answer to all three.

What is a cashback realtor?

A cashback realtor is a licensed real estate agent or brokerage that returns part of the commission they earn to you, the buyer, typically as a rebate paid around closing. Instead of keeping the full buyer-side commission, they share a portion of it with the client who is doing the buying.

The reason this is possible comes down to how commissions work in Ontario.

How do commissions work in Ontario?

In a typical Ontario resale transaction, the total commission is around 5% of the sale price, split between the two sides: roughly 2.5% to the brokerage representing the seller, and roughly 2.5% to the brokerage representing the buyer. Commissions are always negotiable, and on closing day the cheque comes from the seller's proceeds.

But "the seller pays it" is not the same as "it's free to you." The commission is built into the price a home sells for, the same way it would be if the seller had to net a target amount after paying it. As the buyer, you are the one who ultimately pays that price. So when a cashback realtor rebates part of the buyer-side commission to you, they are not handing you a bonus on someone else's expense, they are giving you back a real share of a cost that is already priced into your purchase.

~2.5%

the typical buyer-side commission in Ontario, paid by the seller, that a cashback brokerage can share

We go deeper on the mechanics in How Do Realtors Get Paid in Ontario?

Yes. In Ontario, a registered brokerage is allowed to give a commission rebate or incentive to its buyer client. This is governed by the Trust in Real Estate Services Act (TRESA), the provincial law that replaced REBBA, and overseen by the Real Estate Council of Ontario (RECO).

The important conditions:

  • The rebate must come from a registered brokerage, not an unlicensed third party.
  • It must be disclosed and documented properly as part of the transaction.
  • The brokerage cannot pay a referral fee or commission to someone who is not registered to trade in real estate.

So a cashback realtor is not a loophole or a grey area. It is a registered brokerage choosing to compete by sharing its commission with buyers, which the law expressly permits.