The Illinois General Assembly is now considering HB4313, a bill that would make it illegal for any licensed real estate agents to “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.” This would make it illegal for Redfin or any other broker to refund a commission to a buyer, even though the buyer is the ultimate source of the money from which commissions are paid.
Eleven other states support similar laws, which explains why Redfin hasn’t responded to our many requests to expand to the Portland, Oregon real estate market. The Illinois bill is worrisome to us because of our plans to open a Chicago real estate office this spring (already delayed slightly by a merger of two Illinois listing services).
In most political disputes, it is at least possible to imagine the rationale of either side. But we have never been able to concoct a plausible reason anti-rebate laws are conceivably in the public interest; perhaps our commenters can help? Recent legislative battles in New Jersey and Tennessee put the lie to my original assumption that the current laws must have been an artifact of an earlier, corrupt age. And every progressive Realtor opposes the laws. After grousing about 60 Minutes’s description of its lobbying efforts, even the National Association of Realtors has been at pains to distance itself from the ardent efforts of its state organizations to lobby for anti-rebate laws.
But if it’s hard to imagine how these laws serve the public, it isn’t hard to imagine how they serve their sponsors. Representative Robert Molaro introduced the Illinois bill on January 9, with support Tuesday from Representative Franco Coladipietro and today from Representative Angelo Saviano. In his 2006 campaign, Representative Molaro received four donations from the Illinois Realtors Association; for the same campaign, Representative Saviano received seven donations from the Illinois Realtors Association.
If you live in Illinois, let your representative know how you feel about these laws! Representative Saviano already offers his email address to the public: firstname.lastname@example.org.
(Photo credit to Jeff Holmes (no longer active on Flickr). We included it just because it looks cool.)