Smart homes and appliances are mature concepts in the smart grid. Controlling home energy assets can provide reliability and sustainability benefits, however this concept increases the complexity of electricity grid operations. Aggregators are introduced to facilitate and control the growing number of energy assets in the residential sector using demand response (DR). The aggregators interface the independent-system operator and end-users to provide DR services for all stakeholders. This paper proposes a framework for large-scale incentive-based residential energy management via the aggregator that benefits all entities. Case studies of aggregator DR are reviewed and challenges are listed.