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
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.
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 -
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
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.
you know...I thought it was illegal! great post Thesa!
Go Ducks :-)
Thesa,
Interesting info, so what happens to the rebate brokers in your area?
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?
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!