Posted on 05/29/2007 8:49:17 AM PDT by khnyny
Real estate rebate ban advances Bill would block repeal sought by Justice Dept.
By Richard Locker Contact May 15, 2007
NASHVILLE -- The Tennessee legislature approved a bill Monday banning brokers from giving rebates, gifts or prizes in a real estate transaction despite a strong, rare warning from federal antitrust lawyers that it is anticompetitive and will "cause serious harm to home buyers and sellers."
The bill is sought by the Tennessee Association of Realtors. If signed into law by Gov. Phil Bredesen, it will block the U.S. Department of Justice Antitrust Division's efforts to force the state's Real Estate Commission to remove a similar prohibition from its rules for real estate brokers.
Justice Department lawyers threatened to sue the commission last year if it didn't repeal the rule prohibiting brokers from offering any non-licensed person -- including buyers and sellers -- any rebate on their commissions. The Justice Department filed a similar lawsuit against Kentucky that resulted in a settlement repealing its rebate ban.
The Tennessee commission is in the midst of the lengthy process of repealing its rule, but the bill would effectively block the repeal because, officials said, the Justice Department cannot sue a state legislature.
But it can warn the legislature of the consequences for consumers -- which it did in a rare letter to House Speaker Jimmy Naifeh on Monday.
(Excerpt) Read more at commercialappeal.com ...
Also from the article:
"Unfortunately rebates, in too many cases, take the form of cash incentives that could be used to lure consumers into risky real estate transactions. And in some cases, you could see a rebate used as part of a down payment, which could amount to mortgage fraud," said J.A. Bucy, director of governmental relations for the Tennessee Association of Realtors."
This guy Bucy appears to be lying, lol. What a piece of work.
The only way I'd buy is through a discounter or rebater like Zip Realty. The thought of giving a huge commission on an overpriced house to a dim bulb agent is unacceptable to me. Especially when I've done all the leg work, and they've continuously lied to me.
Damn, a Democrat acting like a Republican and favoring a business interest over the consumer. Who would have thought it possible?
Several years ago, our builder had a 3% rebate offer where all we had to do was use a preferred lender. Half of that covered closing, while the balance bought down the interest rate (fixed). Since then, we have had more trouble from a married pair of real estate agents that live in the neighborhood than we ever have with the lender or builder.
It looks like the powerful NAR (National Association of Realtors) and the Tennessee Association of Realtors has bought the TN legislature. Not good. The TN legislature has, essentially, just flipped the Federal Government it’s middle finger.
Republicans, (at least theoretically) try to limit restrictions on business and encourage competition on the open market.
You’re right. This should get interesting. Something tells me the Governor of TN, Phil Bredesen (D) is trying to shield himself from the fallout. Bredesen doesn’t have to sign this little piece of legislation for it to become law, all he has to do is, well, nothing.
It’s interesting too that Bredesen has appointed a Real Estate Co. executive to the Governor’s eHealth Advisory Council. She seems a rather odd choice. Supposedly this woman is going to represent the “consumer”, too funny.
Elisa D. Parker, Franklin, TN
Pilkenton Real Estate Co., Affiliated Real Estate Broker
http://www.tennesseeanytime.org/ehealth/members/parker.html
Not all of us are sharks, or what have you. Some of us love what we do and help our customers by giving them the best service around. Like my grandmother always said “if you do something good for someone, they will tell their friends. If you do something bad for someone they will tell their friends”
Just something to think about before blasting an entire industry.
No real estate sales droid is worth 6%. A flat fee of $2k to $3k is what is fair for any property.
Hi newbie and welcome, I see you just opened your FR account today!
The buyer’s side broker is where the rebate historically occurs. Flat fee listings, etc. on the selling side seem to be on the rise too.
This is not a business vs. consumer issue so much as it is simply protecting the commission of real estate agents. This is really an anti-freedom bill in that it bans two people from freely entering into an agreement that should be legal. If a buyer pays a $5000 commission, what is wrong with rebating $1000 to the buyer? Realtors are trying to spin this into some kind of illegal immoral practice, when it is not. The only problem I see is if it is used to fraudulently get a loan.
You can't say that. In larger markets you could drop $2K on one ad in the newspaper. In many cases the 6% fee is high, but if an agent does a real marketing job he can earn his commission. Most just simply enter it in the MLS and have an open house or two. That is not worth 6%.
So you joined today for the express purpose of defending realtors?
I was once a realtor, no way is 6% fair. Flat fee is.
I’ll stop blasting real estate once it starts to move to more sane sales terms. For example, rather than a percentage commision they could go to a cost + fixed profit system.
What has happened is that since agents stand to make money when a sale takes place, or stand to make no money if no sale takes place, they have incentive to make overpriced and/or otherwise unwise sales happen. I want someone looking out for my interests and my interests only on such a massive life-changing transaction. For that I’ll gladly pay them money, no matter if a sale happens or not.
And to be honest, most of the real estate agents I run into out here are sharp as a ball bearing, yet drive around in $45K + vehicles. That tells me something’s out of whack.
Try selling it yourself is the other option.
Most people gladly pay 6% which is split between buyers office and seller’s office plus the agent uses his or her own contacts, referrals, relocation,networking ..etc which you will never have. They do advance their splits after a million sold in some cases. There is ongoing education in real estate law as well, ethics committees are set up as well.
Most who enter into deals on their own are the ones who come up crying foul--had I only known!! There are excellent Realtors out there and you just has to be open about the “truth” in regard to your property. CMA’s will show you a fair price per market.
Now the price of gas is upon them..the commission still stays the same. They work on commission only.
As I stated prior..sell it yourself.. Let anyone into your home unqualified as a pseudo-potential buyer. You take the risk! The emotion factor comes into play which is bad for a rational business dealing.
Sure there are scams out there but then the seller is looking to be greedy and greed supports more greed--the old adage lay down with dogs and you might get fleas
No I have always read the postings. This one just struck me as a post I wished to reply to. Being a realtor, yes I am defending myself and my industry.
America is great!! We all can express our opinon.
I appreciate your passion. As a real estate agent I do represent my sellers and their interests only. While I only charge 4% I do EARN my commission. I do more than post in MLS, I actively market my houses, since I feel I must earn my commission. I do not get paid unless there is a meeting of the minds. You must get what it is you’re looking for (based on the market) and I do my best to do that. Once there is a meeting of the minds between you and the buyer I inform you and let you make the decision to sign the binder and accept the offer. At that point I have earned my commission. Other than that I get nothing.
But I do understand and appreciate your frustration as many Americans have with our industry. We all are not like that.
Why, there are several flat fee brokers in my area. I have a friend who sold his house last November using one. It took 9 weeks from listing to closing, and he asked $149900 and got $147500.
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