Good News - The Illinois Association of Realtors is opposing state legislation that seeks to restrict cash rebates to home buyers
The Illinois Association of Realtors is opposing state legislation that seeks to restrict cash rebates and other rewards offered by real estate professionals to unlicensed persons who engage in real estate transactions.
Thankfully - our state association is a bit more advanced in their thinking in some areas - than other state associations such as Wisconsin - which is back in the stone age with it's rules that really put a buyer at a disadvantage most of the time.
The U.S. Department of Justice has taken legal action in other states to undo restrictions that prevent real estate agents and brokers from rebating a portion of the money they receive in a home sale to consumers.
Unfortunately - flying in the face of the DOJ and what is best for the consumer - Illinois state Rep. Robert S. Molaro, D-Chicago, in House Bill 4313 - seeks to amend the state's Real Estate License Law Act of 2000 to state that "no licensee shall give or pay cash rebates, cash gifts or cash prizes to an unlicensed person who is a party to a contract to buy or sell real estate."
When our clients have a buyer brokerage agreement with us - anything extra in a commission payout by the listing firm goes to our buyer client. In this way - we can ensure totally unbiased home showing in relation to the payout.
Traditional agents could potentially have biases in pushing a higher commission payout properties, on their buyer client - all else being equal. Why? Because the agent (split w/their broker from the broker) may get 4% vs. 2.5% for example.
The Illinois Association of Realtors (IAR) was mostly opposed to the bill because they felt that it put Realtors at a disadvantage as compared to builders - who were excluded from the proposed rules.....
The IAR legal counsel stated: "We think it may put some of our members at a disadvantage because it only applies to licensees," he said, as it would allow builders and developers to offer rebates and other cash rewards to consumers that Realtors, as real estate licensees, could not offer.
The IAR STILL does not allow consumers in Illinois to learn about the existance of their option for Exclusive Buyer Brokerage representation in the State's Consumer Disclosure Brochure - claiming that Exclusive Buyer Brokerage is a "business model" - falling under buyer agency. Nothing could be further from the truth.
Use of a buyer agent (they and their company list property for sale) has significantly different implications for a buyer as compared to using an Exclusive Buyer Agent (they and their company never list property for sale / represent sellers.)
Buyer agents are "designated agents" (which is dual agency in sheep's clothing) that can still get in dual agency situations in Illinois if their broker allows it - whereas - every agent in an Exclusive Buyer Brokerage can be behind all of the brokerage's clients. They are not a designated agent - but rather a true agent for the buyer. Buyers have no chance of Dual Agency conflicts of interest using an Exclusive Buyer Agent in Illinois - because EBA's never represent sellers.
Unfortunately - the only State Associations making the public aware of Exclusive Buyer Agency as an option are Ohio and California.
In any case - regarding the main topic of this post.....the bill, introduced Jan. 9, was assigned to a committee on Feb. 13 and a staff member for Molaro said it will not likely be heard in committee this week. The good news is - because of this - from a practical standpoint - the bill might be dead since state sessions are short.
Thankfully - our state association is a bit more advanced in their thinking in some areas - than other state associations such as Wisconsin - which is back in the stone age with it's rules that really put a buyer at a disadvantage most of the time.
The U.S. Department of Justice has taken legal action in other states to undo restrictions that prevent real estate agents and brokers from rebating a portion of the money they receive in a home sale to consumers.
Unfortunately - flying in the face of the DOJ and what is best for the consumer - Illinois state Rep. Robert S. Molaro, D-Chicago, in House Bill 4313 - seeks to amend the state's Real Estate License Law Act of 2000 to state that "no licensee shall give or pay cash rebates, cash gifts or cash prizes to an unlicensed person who is a party to a contract to buy or sell real estate."
When our clients have a buyer brokerage agreement with us - anything extra in a commission payout by the listing firm goes to our buyer client. In this way - we can ensure totally unbiased home showing in relation to the payout.
Traditional agents could potentially have biases in pushing a higher commission payout properties, on their buyer client - all else being equal. Why? Because the agent (split w/their broker from the broker) may get 4% vs. 2.5% for example.
The Illinois Association of Realtors (IAR) was mostly opposed to the bill because they felt that it put Realtors at a disadvantage as compared to builders - who were excluded from the proposed rules.....
The IAR legal counsel stated: "We think it may put some of our members at a disadvantage because it only applies to licensees," he said, as it would allow builders and developers to offer rebates and other cash rewards to consumers that Realtors, as real estate licensees, could not offer.
The IAR STILL does not allow consumers in Illinois to learn about the existance of their option for Exclusive Buyer Brokerage representation in the State's Consumer Disclosure Brochure - claiming that Exclusive Buyer Brokerage is a "business model" - falling under buyer agency. Nothing could be further from the truth.
Use of a buyer agent (they and their company list property for sale) has significantly different implications for a buyer as compared to using an Exclusive Buyer Agent (they and their company never list property for sale / represent sellers.)
Buyer agents are "designated agents" (which is dual agency in sheep's clothing) that can still get in dual agency situations in Illinois if their broker allows it - whereas - every agent in an Exclusive Buyer Brokerage can be behind all of the brokerage's clients. They are not a designated agent - but rather a true agent for the buyer. Buyers have no chance of Dual Agency conflicts of interest using an Exclusive Buyer Agent in Illinois - because EBA's never represent sellers.
Unfortunately - the only State Associations making the public aware of Exclusive Buyer Agency as an option are Ohio and California.
In any case - regarding the main topic of this post.....the bill, introduced Jan. 9, was assigned to a committee on Feb. 13 and a staff member for Molaro said it will not likely be heard in committee this week. The good news is - because of this - from a practical standpoint - the bill might be dead since state sessions are short.
posted by Rick Hauser at
3:23 PM
0 Comments:
Post a Comment
Links to this post:
Create a Link
<< Home