Realtor Cash Back on a New Home in Ontario: How It Works

Where the money actually comes from

On most new-home purchases in Ontario the builder has already budgeted a co-operating commission for a brokerage that brings a buyer. It is built into the price whether or not you bring representation. If you register and buy direct with no agent, the builder generally keeps that amount.

A cash-back rebate is a brokerage choosing to pass some of that commission to you. It is not a discount from the builder and it does not reduce the purchase price; it is a payment from your brokerage, normally after closing once the brokerage itself has been paid.

What TRESA requires to be in writing

TRESA replaced REBBA on 1 December 2023. Under it, your buyer representation agreement is where remuneration is settled — including any amount you might owe and how that obligation changes if the seller or builder covers all or part of the brokerage's fee. RECO's guidance on the remuneration clause in an agreement of purchase and sale deals specifically with a seller agreeing to cover all or part of the buyer's brokerage fees.

RECO has also been explicit that steering a buyer toward a property because it pays more commission is a serious breach, with penalties reaching $50,000 for an individual registrant and $100,000 for a brokerage. That matters to you as a rebate shopper: a rebate should never be the reason a particular community is recommended to you.

Questions to ask before you register anywhere

• Is the rebate a fixed dollar amount, a percentage of the commission, or a percentage of the purchase price?
• What happens if the builder pays a reduced commission, or none at all, on this community?
• When is it paid — on closing, or weeks after the brokerage is paid?
• What service do I give up in exchange? Some rebate models are lower-service by design.
• Is it conditional on using a particular lender, lawyer or title provider?
• Will it be written into the buyer representation agreement, or is it a verbal promise?

The registration trap specific to new builds

On a pre-construction purchase, timing decides whether you have representation at all. Most builders require that your brokerage is named when you first register or first visit the sales office. Register yourself, or through someone else's microsite, and the builder may refuse to recognise a brokerage later — which removes the commission the rebate would have come from.

So the practical sequence is: choose representation first, register second. Doing it the other way round can cost you the rebate and the representation together.