Brokers in Oregon are not allowed to share their commission with an unlicensed person. Often times a seller, buyer or third party will ask for a payment for a referral or as a rebate at closing to give the buyer a bigger incentive to purchase a home.Some Real Estate offices and franchises across the United States have built their business on helping buyers buy a home by offering a rebate at closing. In Oregon this is not acceptable, if your Real Estate professional offers this, they are breaking the law.
In 2007 this matter was reviewed and sponsored by Senator Winters. Changes were made to Senate Bill 673 which discusses the sharing of commission. To read the changes you can read it online at Senate Bill 673. The items in bold are the new and added verbabe to this bill, the state clearly states that sharing commission is unlawful.
Other states have taken the same stand on sharing commission; they include Montana, North Dakota, Iowa, Kansas, Missouri, Oklahoma, Tennessee, Mississippi, Alabama, Louisiana, New Jersey and Alaska.
The Department of Justice has a great website that talks about a lot of the questions that Real Estate Professionals and consumers alike have regarding Competition and Real Estate. With the competition of Real Estate Brokers in Oregon getting fierce, sellers getting frustrated and buyers hearing of kickbacks, rebates and discounts it is more important than ever that the consumer be educated about these laws.
Hmmm…interesting. I wasn’t aware that there had been any legislative activity around the issue of commission rebates. Any idea of whether it picked up momentum?
Ron – howdy – The bill was revised during the session this year – however it really just clairified issues – If I understand correctly this was actually created in 2003 – but this year they added the bold sections – the entire bill can be found at the link above – some people think it will be changed to favor the buyer – I do not think they realize it will only bring the buyer to unethical and less than honest brokers. When buying a home or choosing a REALTOR® comes down to who will give you the most back you may enter troubled waters.
Thesa, in my opinion kickbacks breed contempt and those practicing that type of behavior typically are not the Best Realtors. That’s when the saying, “Buyer beware”…comes to mind.
Oregon obviously can see the corruptness that this leads to.
I agree Gena – I was taken back when a long time buyer asked me about this because another agent had offered it to him. If it wre legal here that would be one thing – but it is not. He even gave my client a print out showing him how he could use the rebate for a downpayment.
People looking to buy and sell real estate should look for the most qualified professional. Buying a house isn’t like getting an oil change- it is a BIG deal. Saving a few pennies via a rebate is not worth it if you have an inexperienced negotiator who doesn’t know how to work in your best interests. What good is a rebate if they lose thousand (or hundreds of thousands of dollars) on the deal? Plus, in your case, it is illegal.
What has been your very best buyers broker experiance/?