The One-Sentence Version
The seller offers a commission to the buyer’s agent. Roman charges a flat fee. The difference is negotiated back to you as a credit on your settlement statement -- structured as a seller concession in the RPA that the seller agrees to as part of accepting your offer, reducing the cash you need to close.
A concrete example
$1,200,000 Home — Los Angeles or Orange County
That $22,750 appears on your settlement statement and is applied against your closing costs at close of escrow. If your closing costs are less than the credit amount, the remainder can offset prepaid items like property tax impounds or homeowner insurance. It cannot be paid to you as cash outside of escrow.
How It Actually Flows Through the Transaction
Understanding the mechanics helps set expectations with your lender and escrow officer before you get to closing day.
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You sign the Buyer Representation and Broker Compensation agreement (BRBC)
Before the first showing, you sign the BRBC stating that Roman’s maximum compensation from any source is $7,250 (homes under $1.5M) or $9,250 ($1.5M+). This is required by California law since the 2024 NAR settlement. The BRBC does not obligate you to buy any particular home -- it documents the fee structure.
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The purchase offer includes the closing cost credit in the RPA
When Roman writes your offer using the California Residential Purchase Agreement (RPA), the closing cost credit is structured as a seller concession. The offer states that the seller agrees to pay buyer closing costs up to a specified amount -- which includes the commission remainder. This is negotiated as part of the offer terms, not added after acceptance.
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The seller accepts -- credit is contractually documented
Once the seller accepts the offer, the credit amount is locked in the contract. Both parties and the escrow officer know exactly what flows where. There is no ambiguity at closing because it is in the signed purchase agreement.
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Escrow applies the credit on the settlement statement
Your escrow officer prepares the ALTA settlement statement (formerly the HUD-1). The closing cost credit appears as a seller concession credited to you, applied against your closing costs line by line. You review and approve the settlement statement before signing.
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You bring less cash to close
The credit reduces the wire or cashier’s check you need to bring to closing. On a $1.2M purchase, $22,750 in closing cost credit means roughly $22,750 less out of pocket on closing day compared to using a traditional 2.5% agent.
What the Credit Can Be Used For
The closing cost credit is applied against your closing costs at settlement. In California, typical buyer closing costs include:
Lender fees
Loan origination fees, discount points (if buying down your rate), appraisal, credit report, underwriting, and processing fees. These are often the largest line items and a natural fit for the credit.
Title and escrow fees
Owner’s title insurance policy, escrow fee (split between buyer and seller in most CA transactions), notary, and document preparation fees.
Prepaid items
Prepaid homeowner’s insurance (usually 12 months upfront), prepaid mortgage interest (from closing date to end of month), and property tax impounds if your lender requires an impound account.
HOA transfer and reserve fees
If the property has an HOA, transfer fees, resale disclosure fees, and sometimes a reserve contribution are buyer closing costs that the credit can cover.
Will Your Lender Allow It?
Yes, in virtually all cases. The closing cost credit is structured as a seller concession -- a completely standard element of California real estate transactions that lenders see on every deal. It is not a special structure that requires lender approval beyond what is already built into the loan guidelines.
Seller concession caps by loan type: Conventional loans with 10%+ down payment allow seller concessions up to 6% of the purchase price. FHA loans allow up to 6%. VA loans allow up to 4%. The closing cost credit in a flat fee transaction is a small fraction of these caps -- at $22,750 on a $1.2M purchase, it represents 1.9% of the price, well within any loan type’s limits.
The one scenario worth knowing: if your total closing costs are less than the credit amount, your lender may not allow the full credit to be applied -- unused seller concession credit cannot be paid out as cash. In practice this is rarely an issue because California closing costs on a $1M+ purchase typically run $15,000-$30,000, and the credit is usually fully absorbed. Roman confirms the credit structure with your lender during the offer preparation process.
Disclosure to your lender
Because the credit is structured as a seller concession in the RPA, it is disclosed to your lender on the purchase contract they receive. There is nothing to hide or separately disclose. Your loan processor sees it, underwriting approves it, and it appears on the Closing Disclosure your lender sends you before closing. No surprises.
Closing Cost Credit vs. Buyer Rebate -- What’s the Difference?
These terms are sometimes used interchangeably but they are structured differently. Understanding the distinction matters if you are comparing Roman’s model to other services.
Side-by-Side Comparison
Roman uses the closing cost credit structure rather than a direct rebate because it is cleaner for lenders, requires no separate rebate agreement or disclosure, and is universally accepted across all loan types. The financial outcome for you is identical -- you pay less out of pocket at closing.
How Much Is Your Credit?
The math is straightforward. The seller-offered commission minus the flat fee equals your closing cost credit.
Examples at Common LA / OC Price Points
These examples assume a 2.5% seller-offered buyer broker compensation. Actual compensation varies by property -- some sellers offer 2%, some 2.5%, some 3% -- the credit adjusts accordingly. Roman confirms the seller-offered commission on every property before writing any offer.