Paying consumers to use your service has always been a no no in the state of Texas. Referral fees are limited, gifts are limited, but rebating has always been on the edge of both. Personally for me, it angers me that I cannot pay more in referral fees, but it has always kept the playing field level here in Austin. When I first began in the business, a local mega producer had local apartment communities on salary- the on-site was paid a monthly automatic fee for a guarantee that he would receive any and all referrals. Now for a new guy, there was no way I could compete with that, it was unfair.
Paying consumers to use your service is no different as I see it, it is just a direct referral fee. Most of the time, the builder, or a lender wants to know nothing about what you’re rebating, why? Because it creates a gray area in some cases, is additional contributions that some loans bar, and various other issues.
With the sub-prime fiasco that had the market in a virtual panic a few months ago, it only drives my point home. If you want to do good by the consumer and be pro consumer, then roll back the final sales price for the buyer. Allowing a buyer cash back rewards for using your service is financed, they’re paying X interest rate on the cash. Why not do the right thing and create further equity for the consumer- thus, pro consumer. And you level the playing field between all…
So, my suggestion- it should be rolled off of the sales price. Then consumers can shop without being bribed into a lesser service. Then it really is a consumer driven solution, levels the playing field, and forces all to compete on negotiated commissions.
This is a quote from Buyside Realty’s website:
That is just disgusting and just as bad as NAR passing laws barring rebates (NAR shouldn’t have to force you to be ethical). NAR did not say you couldn’t discount your fees, they simply said you can’t bribe a buyer– it isn’t in a buyers interest to finance cash back.
In my humble opinion the law absolutely levels the playing field for the discounters to compete fairly.
Read the (slanted) breakdown of the bill here
That one sentence is the bottom line, and I happen to agree with it. Sorry folks.