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Oregon REALTORS® Can Not Give Rebates!

By Thesa Chambers

Real Estate Agent with West + Main

October 19, 2007 04:17 PM

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.

________________________________________________________________________________________________________
Thesa Chambers • Broker • RE/MAX Sunset Realty
541-771-7064 Cell • 541-536-0117 Office • 888-868-2050 Toll Free
Mailing Address • PO Box 3510, La Pine, OR 97739

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Thesa Chambers

West + Main - Bend, OR

Principal Broker - Licensed in Oregon

Sally - Obviously none of our offices advertise this - but today I had a long time buyer call me and ask me about this - they ran into another Broker at an open house - and he offered them this - I had to show them these pages - and they say they are turning him in.... we shall see - but the guy was dumb enough to put it in writing to them... I was pretty amazed at this.

Oct 19, 2007 04:35 PM

Joanne Hanson

Coldwell Banker Colorado Rockies Real Estate - Frisco, CO

Summit County, Colorado Realtor

Hi Thesa, another new photo! It is nice to see what you really look like...you were hiding behind the dog before ;)

I like that state law. It will probably loosen up as laws get more consumer friendly, but you never know.

Oct 19, 2007 05:04 PM

Thesa Chambers

West + Main - Bend, OR

Principal Broker - Licensed in Oregon

Joanne - I was surprised it was actually tightened in 2007 instead of loosened - Real Estate in Oregon is a lot different than other places I am finding - we actually have a law that is referred to as the "should have known" law - it basically says an agent can be held responsible for not disclosing information that they could have or should have known - such as the Conditional Use Permit on the wetlands issue.

The buyer and seller are pretty protected -

Oct 19, 2007 05:12 PM

Richard Perkins

R PERKINS REALTY - Stockton, CA

Very good info Thanks for the post keep up the good work

Oct 19, 2007 05:47 PM

Courtney Cooper

Cooper Jacobs - Seattle, WA

206-850-8841

What about contributing to closing costs , etc.? Great post!

Oct 19, 2007 05:57 PM

Thesa Chambers

West + Main - Bend, OR

Principal Broker - Licensed in Oregon

Richard - thanks - you keep commenting I will keep writing - I need more people like you :o)

Courtney - Closing costs are sharing - however, the seller can pay the closing costs and the listing agent can reduce the commission with a fee agreement - nothing can come from the commission that is not going to a licensed real estate agent - If an agent pays for let's say a window to be repaired - in reality the agent must pay it from their pocket or - have the seller pay it from proceeds and then lower the commission - commission can not be shared with a non-licensed person

Oct 19, 2007 06:46 PM

Jennifer Fivelsdal

JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY

Mid Hudson Valley real estate connection

Thesa - New York is one of those state that this is also not acceptable. Thanks for sharing that website.

Oct 19, 2007 11:16 PM

Matthew J Blum - (retired from the business)

Palm Beach Gardens, FL

Thesa, Great POST!! I can't tell you how many times I hear from people if they send me a client what will I give them as a referral fee? I tell them I can't because it would be considered a kick back and it is illegal. Then they look at me like I have 3 heads...

Oct 19, 2007 11:23 PM

Missy Caulk

Missy Caulk TEAM - Ann Arbor, MI

Savvy Realtor - Ann Arbor Real Estate

You're new picture looks great !! I get asked this all the time from people moving here from California. I just don't do it.

Oct 19, 2007 11:30 PM

Neal Bloom

Brokered by eXp Realty LLC - Weston, FL

Realtor CRS-Weston FL Real Estate

Thesa,

I think here you can give the client a contribution but it must be on the HUD and must be approved. Ive never done it but I have seen it done.

Oct 20, 2007 01:26 AM

Teri Eckholm

Boardman Realty - White Bear Lake, MN

REALTOR Serving Mpls/St Paul North & East Metro

Thesa--Good information as many don't seem to understand that laws vary from state to state on this. Watching a national program for advice is not recommended...Talk to a licensed professional in the state in which you want to make a purchase or sell a home for the correct information.

Oct 20, 2007 02:24 AM

Rick Grand

nowhere - Eugene, OR

you know...I thought it was illegal! great post Thesa!

Go Ducks :-)

Oct 20, 2007 10:58 AM

Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Thesa,

Interesting info, so what happens to the rebate brokers in your area?

Oct 20, 2007 02:33 PM

Marchel Peterson

Results Realty - Spring, TX

Spring TX Real Estate E-Pro

Thesa, it is interesting to hear what other states in the US are doing. Thanks for sharing.

Oct 20, 2007 03:05 PM

Margaret Woda

Long & Foster Real Estate, Inc. - Crofton, MD

Maryland Real Estate & Military Relocation

You ask some good questions, Thesa, and I look forward to reaading the comments on this thread.

I think we have to be very careful about rebates and price discounting - it seems to me that pricing has to be POLICY applied to everyone, or we risk equal housing opportunity violations, or at least accusations. When someone asks me for a discount, I explain that I believe in principal in negotiating my fee, but fair housing laws do not allow me to treat any client different from all others.

Am I wrong about this?

Oct 21, 2007 01:05 AM

. .

no thanks - Harlem, MT

When I first got started in Real Estate, an investor was referred to me who wanted to pay ME a referral fee and I thought that was illegal too. He also wanted to use my RMLS codes. I refused to work with him, but the sad thing is that he did partner up with a broker who was willing to compromise.

Oct 21, 2007 11:01 PM

Amanda Evans

DFW Living - Fort Worth, TX

Real Estate Broker - Fort Worth Texas

Margaret--I am curious to know if you are wrong about this as well! I think you have an excellent point, but I'd be very hesitant to make it. I'm surprised this thread stopped short of discussing your comment and I'd be interested in reading what other seasoned pros have to say about it.

Nov 22, 2007 01:45 PM

Greg Fox

Realty World Wichita - Wichita, KS

Techy Broker in Wichita Kansas

Great post. Kansas had a "should've known" law. It was reversed several years ago. Hard for a Realtor to know about foundations, mold, etc. The Property Disclosure becomes the sellers statement of truth.

I just had my Records audit by the state. He told me that next time, the buyer agency commission should reflect what is on the HUD statement. Any discounts need to be reflected in our closing records and contract. Kansas will not allow a broker to pay a non-licensed person, but we can discount. I think this is a great law, it stops loan fraud. All moneys used by the buyer must be reflected on HUD1, and the bank will have to give approval!

Nov 22, 2007 02:31 PM

Natalie Langford

Realty Negotiations - Winchester, VA

Winchester, VA Real Estate

This is off topic - but I would love for you to blog on how you got the bottom piece of your blog to link back to your website with those awesome buttons! Are those widgets? Can you email me when you do that?!?!

Nov 22, 2007 02:55 PM

Sarah Eubanks

Hill Valley Financial Services - Oregon City, OR

Preferred Oregon Loan Consultant & Notary Public

Thesa ~ First of all, I like the new photo! Very sassy and happy looking! :) Second of all, I am particularly thankful that there are rules and regulations in place. It makes for an even more playing field. Thank you for doing the research on Jackie Winters' bill and posting it here! :) Hope you had a great Thanksgiving!

Nov 23, 2007 07:40 AM