Real Estate Broker Commission Rebates in NYC & Westchester

A better way to buy | Digs Realty broker commission rebates

One of our biggest challenges is educating home buyers that our commission sharing model exists. Most people are not aware that they can hire a real estate broker who offers commission rebates. Digs has been operating in NYC since 2014 and has given $4MM in rebates and discounts to its buyer and seller clients. We recently expanded to Westchester, New York, so we can save home buyers and sellers money in more places.

Once people know what we do, our next challenge is convincing them that we are just as good (if not better) than our traditional real estate agent competitors. A natural instinct is to think we offer rebates because we are not good. Thankfully, we have a long track record of proving this is not the case, and we are happy to connect potential clients with any of our current or former clients to hear what they think. Not only do we pay you to buy your home, but our clients agree we add lots of value. Our skills, honesty and professionalism is how we have built and grown our business over the last five years. The rebate is just icing on the cake.

How do broker commission rebates work?

When you buy a home with Digs Realty, we pay you up to 67% of our commission at closing (that’s up to 2% of your purchase price, or 10% of your down payment if you’re financing 80%).

Take the following example:

  • You buy a home for $2,000,000
  • The seller pays a 6% commission = $120,000
  • The commission is split 50%/50% between the buyer’s and seller’s agents = $60,000 to Digs Realty
  • Digs keeps 1/3 of the commission received = $20,000
  • Digs pays you 2/3 of the commission received = $40,000

Yes, this is 100% legal in New York State. Not only are real estate rebates legal, but, in 2015, the Attorney General encouraged it in a press release:  A.G. Schneiderman Urges Brokers and Home Buyers in New York to Take Advantage of Law Allowing Lower Commissions

In addition to being legal, the IRS issued a private letter ruling stating that commission rebates are generally not taxable as ordinary income, but rather reduce the buyer’s cost basis in the property. In the example above, the buyer received a $40,000 rebate on a $2,000,000 purchase.  The IRS sees the buyer as only having paid $1,960,000 for the property. Since we are not accountants or tax professionals, we advise you to consult with a tax professional with respect to the tax implications of the rebate. You can find the IRS ruling here.

For a more complete explanation of how our commission sharing model works, take a look at our whiteboard video.



Digs Realty is a residential real estate brokerage in NYC that provides full service at a discount. The Digs Mission: Saving you money without compromising service. We give our home buyers up to 67% of our commission and charge our sellers up to 4% less than traditional brokerages.

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