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Mr. Smith goes to the Real Estate Commission... Introduction

Real Estate Agent with 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.

Do you disclose the rebate to the lender? Do they approve?
Nov 13, 2007 09:52 AM
Don Zimmerman
IEC Realty - Wasilla, AK
As of yet, we have not done any transactions with the rebate program, but yes, we do intend to disclose it to the lender. I am not sure that it is required though, is it?
Nov 13, 2007 11:21 AM
Some say that it is, some say that it isn't. If used for closing costs, then obviously the lender would have to approve it. However, do rebates after closing require lender approval? You can't get a straight answer. One thing is for sure, Lenders don't allow cash back after closing. So when the DOJ says "Rebates are cash payments", from what position are they coming from?
Nov 14, 2007 12:06 AM
West Hartford CT Real Estate Agent | West Hartford Realtor | www.CTMike.com
ERA Broder Group - West Hartford, CT
WOW... Keep me posted Don. I am considering this as well... Mike
Apr 07, 2008 05:56 PM
Mike Mayer
Mike Mayer, Broker/Owner - i List For Less Realty, LLC - Lafayette, LA

I'd like an update as well. I practice in 2 states; one permits rebating and the other does not.

Apr 03, 2011 11:13 PM