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OBVIOUSLY...I'm not on here all that often. But, I will be keeping the Facebook, Twitter and Blogger worlds up to date on the Alaskan real estate market...well, real estate in general...and even throw in a few of my daughter, Esther Zimmerman's (www.EstherZimmerman.com and also on facebook and twitter) photos that show case Alaska's magnificent beauty.
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Here is a link to what the DOJ has to say about offering rebates to consumers in the real estate industry: http://www.usdoj.gov/atr/public/real_estate/rebates.htm The Department of Justice has repeatedly shown that rebates are good for consumers and create healthy competition. A few thoughts... - Rebates are widely accepted in most industries outside of real estate, they provide a benefit to those who are willing to take the time to follow a few instrustions.
- Even within the real estate industry they are legal in at least 40 of the United States.
And the Alaska Real Estate Commission is trying to tell me that rebates are inherently fraudulent? More to come... Don Z.
This is the letter I sent over to the Attorney General's office after realizing that arguing with the investigator with the real estate commission was not going to get me anywhere: Honorable Attorney General Colberg State of Alaska CC: Bennett Matelson, United States Dept of Justice Mr. Attorney General Colberg, The purpose of this letter along with the attached documentation, is for your review in regards to the certified letter from the Alaska Real Estate Commission stating that I am to "Cease and Desist" from further use of the Cash Rewards rebate program. I am requesting the removal of the cease and desist order, and a written statement to that effect, interpreting the statute in terms of its original intent, and in compliance with anti-trust laws. The statute they cite is as follows: AS 08.88.401 Prohibited conduct (d) A person licensed under this chapter may not knowingly pay any part of a fee, commission, or other compensation received by the licensee in buying, selling, exchanging, leasing, auctioning, or renting real estate to (1) a person who is not licensed under this chapter, except as provided in (e) of this section
(e) The prohibition of (d)(1) of this section does not prohibit (1) payments by a licensee to a person licensed to perform real estate activities in another jurisdiction if the other person has assisted the licensee in the performance of an act for which a license is required by this chapter; or (2) payments from a real estate licensee to a principal as part of the resolution of a dispute regarding the terms of a transaction or regarding the property transferred.
(g) A person who violates this section or AS 08.88.161 is guilty of a class A misdemeanor. In the REC correspondence to me, the REC has interpreted the above to mean that: "Purchase incentives are specifically prohibited" "Anything that is conveyed of monetary value" to an unlicensed party is illegal. (i.e. that which is purchased by the licensee with fees, commissions, or other compensation justly earned in the course of a transaction and then given to the consumer or principle of the transaction.)
This interpretation would make (d) to mean that the giving of a gift basket, gift card, or any other closing gift, is equivalent to paying an unlicensed party! This was not the intent of the law. This statute has been interpreted to mean that the Licensee's principle is not to receive benefits from the licensee after closing. This issue is bigger than Cash Rewards, the specific rebate program used is not the issue. I have been licensed in the State of Alaska since 1984 and was present during the time when HB33 was introduced. This portion of the Bill was clarified and strengthened in 1998 to strictly prohibit a licensee from entering into a "marketing kickback" scheme with a marketing company that promised kickbacks to unlicensed persons. i.e. Cosco and unlicensed referral companies (See the Sponsors of the bill summary below). These Kickback schemes were not to a principle in transactions. The Cash Rewards incentive I am offering is a gift from me to my client. My agreement is with the buyer or a seller directly related to my transaction. The commission earned is directly related to the service and benefits I provide either to the buyer or seller of the transaction (principle). I am providing a certificate, similar to a closing gift. The principle to the transaction is not getting compensated for anything related to the requirements of AS 08.88. i.e. I am not paying them for referrals, negotiating, etc. The client is merely taking advantage of some of the benefits and services we offer. I believe the original intention of the bill was good, I do not believe the current so call "interpretation" of the bill is good for several reasons: 1. The interpretation is not in writing and is subjective to the interpreter. This puts the interpreter on the spot and the Licensee has to guess every time they want to run a promotion. The State of Washington has a statute in place which is almost identical in many respects to AS 08.88.401, and is not in violation of anti-trust laws. Their interpretation is as follows:
According to long-standing interpretation, it does not violate Washington State's laws governing the licensing of real estate brokers and real estate salespersons to rebate all or a portion of a real estate commission to an unlicensed principal (buyer, seller, lessor, lessee) in the transaction in which the commission is generated. It would violate licensing law to share a commission or pay a referral fee to an unlicensed party who is not a principal in the transaction where the commission is generated. Accordingly, a licensee could advertise: "buy or sell through me and I will give you _________". A licensee should not advertise: "refer somebody to me who buys or sells and I will pay you ________ for the referral". A one-time unexpected thank you gift would not be a violation of licensing law. A promotion, in which unlicensed participants, with the expectation of compensation are encouraged to procure prospects for real estate transactions, would be a violation.
A rebate of all or a portion of a commission by a dual agent would require the written agreement by both the buyer (or lessee) and the seller (or lessor). A rebate of all or part of the commission to the buyer by the company representing the buyer, or to the seller by the company representing the seller, would not require written consent of both buyer and seller. A rebate to a buyer should be disclosed in documentation provided to any lender in the transaction providing financing to the buyer. A rebate to a seller in a short sale must also be disclosed to the seller's lender.
Since transaction disbursements are usually handled by a closing agent, brokers are encouraged to seek advice from their accountant or tax attorney before offering or agreeing to disbursements after or outside of closing. A commission rebate disbursement outside of closing, by itself, would not violate licensing law. Accountants or tax attorneys might advise that a disbursement outside of closing could be considered to be a non-deductible gift, leaving the broker with tax liability for the full commission while netting only a portion of the commission. I believe that it's also likely that a Form 1099, not reflecting the rebate, would be generated.
Washington Law:
RCW 18.85.330 Sharing commissions. | |
(1) Except under subsection (4) of this section, it shall be unlawful for any licensed broker to pay any part of his or her commission or other compensation to any person who is not a licensed real estate broker in any state of the United States or its possessions or any province of the Dominion of Canada or any foreign jurisdiction with a real estate regulatory program.
(2) Except under subsection (4) of this section, it shall be unlawful for any licensed broker to pay any part of his or her commission or other compensation to a real estate salesperson not licensed to do business for such broker.
(3) Except under subsection (4) of this section, it shall be unlawful for any licensed salesperson to pay any part of his or her commission or other compensation to any person, whether licensed or not, except through his or her broker.
(4) A commission may be shared with a manufactured housing retailer, licensed under chapter 46.70 RCW, on the sale of personal property manufactured housing sold in conjunction with the sale or lease of land. 2. REC interpretation is in clear violation of Sherman Anti-Trust laws, and is a form of price-fixing, Washington interpretation is not. It is illegal to prohibit free competition in such a way. This has been demonstrated in United States of America Vs. Kentucky Real Estate Commission http://www.usdoj.gov/atr/cases/krec.htm which is also attached. The attached document explains this much more clearly than I could, so please review. The agents involved in passing the original law would be in violation of the conspiracy if they used the same interpretations used currently. The Licensees on the REC board will be in violation of Anti Trust conspiracy if they talk about and encourage this interpretation. 3. This interpretation is in direct contradiction to the stated mission of the Alaska Real Estate Commission: "The mission of the Alaska Real Estate Commission is to protect the public interest..." 4. By prohibiting rebates and limiting competition through the current interpretation of AS 08.88.401, the Real Estate Commission is harming the public, by forcing consumers to pay higher prices for fewer services, than would otherwise be attainable in an open and competitive market. As a result, Alaskan consumers could unnecessarily be paying hundreds of thousands of dollars a year due to artificial price controls. This is exactly the purpose of anti-trust and price fixing laws. The real estate commission and State of Alaska are currently harming the public, those who they exist to protect. The Department of Justice highlights some of the advantages to consumers of rebates at: http://www.usdoj.gov/atr/public/real_estate/rebates.htm 5. Also attached are letters from Law offices of Incorvaia regarding California law, FTC and RESPA I, Don Zimmerman at IEC Realty would like it noted that I am in complete opposition to any and every form of anti-trust violation or price fixing, and that we believe that any limitation of rebates, inducements, incentives, gifts, etc. from a licensee to his/her principle is a violation of federal law. I will not cooperate in any way with such illegal and conspiratorial activities. See below for additional research Please find attached: Sherman Anti-Trust Law 1 pp.
United States of America vs. Kentucky Real Estate Commission 14 pp.
Washington Statute and its Interpretation 3 pp. Sincerely, Don Zimmerman
IEC Realty
This is the beginning of a series of posts detailing my dealings with the Alaska Real Commission, and other groups in the state of Alaska who are attempting to prohibit a licensee/agent from giving back part of a commission to their clients. I never thought that I would be given a hard time for giving part of my commission back to my clients! These articles are for those: •1. Agent/licensees who would like the freedom to be able to give their buyers and sellers back part of their commission, and who would like to provide benefits and services after closing in order to retain their competitive edge. •2. Buyers and sellers who would like to receive back part of their commission! A brief intro: A while back I received a certified letter from the real estate commission stating that I was to "cease and desist" (yes I have said "decease and desist" and error a few times in conversation! :) offering rebates to my clients. I am a real estate licensee in the Mat-Su Valley and Eagle River, AK and have been offering that if a buyer or seller purchases or sells a home through us they will receive up to $10,000 cash rewards. The rules, as with any rebate program, whether it be a car, laptop or cell phone, are that certain documents must be submitted in a timely manner. The buyer or seller has one week to submit documentation such as a HUD/settlement statement. 36 months later there is another one week window to submit verification that they are the same person that the rebate certificate was issued to. After submitting the paperwork the buyer or seller is able to claim their cash. All of the terms and conditions are disclosed ahead of time, and the program is handled reputable third party institutions, such as Citibank. Apparently a buyer approached his licensee and asked, "Could you meet or beat this?" So, the licensee complained to the real estate commission. It seems that statutes and regulations are now a handy tool whereby healthy competition can be thrown out the window, and those that would offer more to consumers are pulled back into line. In the upcoming posts I will look at rebates in light of anti-trust laws, as well as from a consumer's point of view. Please stay tuned! Don Z.
 Our family loves to go hiking...and we like it even better when we go hiking in the stunning Hatchers Pass area.
Here is what Wikipedia has to say about Hatchers: "Hatcher Pass (3886 ft./1148 m.) is a high mountain pass in the Talkeetna Mountains. The nearest communities are Fishhook to the South and Willow to the West. It is a well frequented recreation area, with outdoor activities including hiking, camping, skiing, etc. The Hatcher Pass lodge offers food and lodging. A copper/gold mining operation previously extended throughout the area, and relics of the time are still apparent."
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CountryUnited States|
StateAlaska|
BoroughMatanuska-Susitna| Area | - City 3.8 sq mi (9.7 km²) | - Land| 3.8 sq mi (9.7 km²) | - Water| 0.0 sq mi (0.0 km²) | |
Elevation 233 ft (71 m) | | Population (2000) | - City4,533 | - Density1,206.3/sq mi (465.7/km²) | |
Time zoneAlaska (AKST) (UTC-9) | - Summer ( DST)AKDT (UTC-8) | |
ZIP code99645 | Area code(s)| 907 | |
FIPS code02-58660 | |
GNIS feature ID1407737 |   This is the view as you travel toward Anchorage from Palmer. Pioneer Peak is to the left with Twin Peaks to the right. The "Ghost Forest" is shown in the foreground. These trees died from the subsidence that occurred in the area as a result of the Great Alaska
Earthquake of 1964.  The Alaska State Fair just outside of Palmer. Palmer is a city in and the borough seat of the Matanuska-Susitna Borough in the U.S. state of Alaska. As of the 2000 census, the population of the city was 4,533. 2005 Census Bureau estimates give the city a population of 6,920.[1]GeographyPalmer is located at  61°36′7″N, 149°7′2″W (61.601879, -149.117351)GR1.Palmer is 68 km (42 miles) northeast of Anchorage on the Glenn Highway.According to the United States Census Bureau, the city has a total area of 9.7 km² (3.8 mi²), all land.
DemographicsAs of the censusGR2 of 2000, there were 4,533 people, 1,472 households, and 1,058 families residing in the city. The population density was 465.5/km² (1,206.3/mi²). There were 1,555 housing units at an average density of 159.7/km² (413.8/mi²). The racial makeup of the city was 80.94% White, 2.05% Black or African American, 8.18% Native American, 1.06% Asian, 0.33% Pacific Islander, 1.15% from other races, and 6.29% from two or more races. 3.51% of the population were Hispanic or Latino of any race. 14.9% were of German, 10.5% United States or American, 8.9% Irish and 8.7% English ancestry according to Census 2000.There were 1,472 households out of which 47.4% had children under the age of 18 living with them, 50.3% were married couples living together, 16.6% had a female householder with no husband present, and 28.1% were non-families. 23.0% of all households were made up of individuals and 7.5% had someone living alone who was 65 years of age or older. The average household size was 2.81 and the average family size was 3.29.In the city the population was spread out with 33.6% under the age of 18, 11.8% from 18 to 24, 28.7% from 25 to 44, 16.8% from 45 to 64, and 9.1% who were 65 years of age or older. The median age was 29 years. For every 100 females there were 98.1 males. For every 100 females age 18 and over, there were 93.6 males.The median income for a household in the city was $45,571, and the median income for a family was $53,164. Males had a median income of $44,716 versus $25,221 for females. The per capita income for the city was $17,203. About 6.0% of families and 12.7% of the population were below the poverty line, including 12.6% of those under age 18 and 4.2% of those age 65 or over.
HistoryPalmer began in 1916 as a railway station on the Matanuska branch of the Alaska Railroad. In 1935, during the Great Depression, the Federal Emergency Relief Administration, one of President Franklin D. Roosevelt's New Deal projects, established the Matanuska Colony. From Michigan, Wisconsin and Minnesota, 203 families traveled by train and ship to reach the fledgling colony, arriving in the summer of 1935. Upon their arrival they were housed in a tent city during their first Alaskan summer. Each family drew lots for 40 acre tracts and their farming adventure began in earnest. The failure rate was high, but many of their descendants still live in the area. While the colonists had varying degress of success with farming, Palmer is the only Alaskan Community that developed from an agricultural lifestyle. In addition to an agrarian heritage, the colony families brought with them small town values, institutional structures, and a well planned city center. Many of the structures built are now in a nationally recognized historic district. Construction of the statewide road system and the rapid development of Anchorage has fueled growth around Palmer. Many Palmer residents commute to work in Anchorage.
Points of InterestPalmer is most noted in Alaska as the location of the annual Alaska State Fair, an event in the early fall known for its record-setting giant cabbages, among other attractions.Palmer hosts an historic log cabin Visitor Center in the heart of downtown that entertains more than 35,000 visitors each year. The visitor center has a two acre showcase garden and lawn that is the "perfect place to have a picnic." The Palmer Museum of History and Art is located in the Visitor Center and offers visitors chance to view artifacts from Palmer's history and learn about how the town came to be.A couple of blocks away from the visitor center is the United Protestant Church. It was built in 1936-37 and is one of the historically registered original colonial buildings in Palmer. There are also several bookstores, including "Alaskana Books" which carries a collection of rare and collectible Alaskana books, and "Fireside Books" a quirky little independent bookstore, known for its good books and ugly coffee.The Mat-Su Miners, a franchise in the Alaska Baseball League, a high-level summer collegiate baseball league, play their games at Herman Brothers Field in Palmer. With Division I collegiate players from all over the United States, the Miners have twice captured the coveted National Baseball Congress championship, in 1987 and 1997.Palmer is also home to many public and private schools, such as Palmer High.
Here are some pictures that were taken right out back of our house. Alaska is truly a beautiful place and I'm privileged to live here! 
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