REBATES and REQUIRED SERVICE LAWS - By State

REBATES and REQUIRED SERVICE LAWS - By State

When you consider the Rebate and Required Service Law differences that exist in our great nation, it's not difficult to comprehend why real estate practices are so confusing. It goes without saying that property values vary from region to region and state to state. That's a well accepted assumption. However, the rules that govern our business are so ranging, so broad in scope, that such differences and variations add to the perplexity.

Ten states forbid Buyer's Brokers from rebating a portion of the sales commission to the consumer. Such laws prevent an agent from contributing funds towards a clients closing costs or 'gifting' a client for a referral lead. In Louisiana, an Agent is not even allowed to show appreciation by providing a gift card to a client who refers the name of someone they know who has a real estate need. In Texas, such gifting is permitted, as long as the value is limited to $50 or less.

Eight states require consumers to buy more services from Seller's Brokers than they may want, with no option to waive the extra items. The movement to impose minimum service requirements on Real Estate Brokers began in 2004, when Florida and Illinois enacted such laws. The measure captured the attention of federal antitrust lawyers who warned that the regulations adopted by these Real Estate Commissions were anti-competitive.

The new measures required Real Estate Brokers to receive and present offers and counteroffers, offer negotiating advice, complete forms, and answer questions. Prior to this date Discount Brokers were allowed to enter a Seller into the MLS without any further involvement on the Broker's part. Critics complained of potential Agency concerns since Buyer's Agents were communicating directly with the Seller. It was argued that minimal service requirements are skills that should not be performed by a novice consumer. In Louisiana, no such law exists; a Broker may place the propertry of a Seller into the MLS, without further duties, obligations or responsibilities to the Seller, as along as there is compensation to the Buyer Broker.

Rebate and Required Service Laws are listed below By State:

AL
X Limits choice of brokerage services
X Prohibits brokers from offering rebates to consumers

AK
√ Allows choice of brokerage services
X Prohibits brokers from offering rebates to consumers

AZ
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

AR
√ Allows choice of brokerage services
√ Allows rebates to consumers

CA
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

CO
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

CT
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

DE
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers
 
DC
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

FL
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

GA
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

HI
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

ID
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

IL
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

IN
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

IA
X Limits choice of brokerage services
X Prohibits brokers from offering rebates to consumers

KS
X Limits choice of brokerage services
X Prohibits brokers from offering rebates to consumers

KY
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

LA
√ Allows choice of brokerage services
X Prohibits brokers from offering rebates to consumers

ME
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

MD
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

MA
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

MI
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

MN
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

MS
√ Allows choice of brokerage services
X Prohibits brokers from offering rebates to consumers

MO
X Limits choice of brokerage services
X Prohibits brokers from offering rebates to consumers

MT
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NE
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NV
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NH
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NJ
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NM
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NY
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

NC
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

ND
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

OH
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

OK
√ Allows choice of brokerage services
X Prohibits brokers from offering rebates to consumers

OR
X Limits choice of brokerage services
X Prohibits brokers from offering rebates to consumers

PA
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

RI
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

SC
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

SD
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

TN
√ Allows choice of brokerage services
X Prohibits brokers from offering rebates to consumers

TX
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

UT
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

VT
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

VA
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

WA
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

WV
X Limits choice of brokerage services
√ Allows brokers to offer rebates to consumers

WI
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

WY
√ Allows choice of brokerage services
√ Allows brokers to offer rebates to consumers

Source: http://www.justice.gov/atr/public/real_estate/index.htm