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04/01/2012   US Department of Justice Promotes Cash Refund to Consumers

Consumers who live in states permitting the option to choose innovative brokerage options, such as rebates or fee-for-service MLS-only packages, can potentially save thousands of dollars on commission payments.

How do rebates work?

Some real estate brokers offer consumers cash refunds or non-cash incentives to encourage them to use that broker’s services. Rebates are typically cash payments from the real estate broker to his or her client after closing. Incentives may include gift certificates, closing-cost payments, or free ancillary services such as home inspections or moving services.

Learn more: Full-Service Discount Brokers

How do rebates benefit consumers?

Rebates can save consumers several thousand dollars in a single transaction. For example, if a broker offers to refund one-third of its commission to the homebuyer, the average buyer of a $300,000 home could save $2,500 to $3,000 (based on the 2.5% to 3% commission rates typically earned by the buyer’s broker).

Flowchart: Buyer purchases home for $300,000

Incentives, such as gift certificates for a home inspection, merchandise at a nearby hardware store, or moving services, give consumers monetary benefits from the transaction that they otherwise would not have obtained.

Offering rebates and incentives is one way that real estate brokers can compete for consumers’ business, leading to lower prices to consumers.

Do refunds and incentives pose any risk to consumers?

Some have argued that refunds and incentives can tempt consumers into closing on real estate transactions against their best interests. The Antitrust Division has found no evidence that refunds and incentives harm consumers. On the contrary, they can dramatically lower the price that consumers pay for brokerage services.

Do real estate brokers support rebate bans?

Some brokers support rebate bans as a means of reducing price competition. For example, when the Kentucky Real Estate Commission surveyed brokers about lifting that state’s rebate ban, here is what some of them said:

“If we give rebates and inducements, it would get out of control and all clients would be wanting something. The present law keeps it under control.”

“This would turn into a bidding war, lessen our profits and cheapen our ‘so-called’ profession.”

“If inducements were allowed, they could lead to competitive behavior, which would make us look unprofessional in the eyes of the public.”

“I think this would just take money right out of our pocket.”

Which states currently ban rebates and/or inducements?

Ten states currently have laws that ban rebates. Nine states have a full ban on broker rebates: AlabamaAlaskaKansasLouisianaMississippiMissouri,OklahomaOregon, and Tennessee. In addition, Iowa prohibits rebates when the consumers use the services of two or more real estate brokers during a transaction.

 

News Item

03/07/2012   February 2012 Employment Report

February 2012 ADP National Employment Report

 
Employment in the U.S. nonfarm private business sector increased by 216,000 from January to 
February on a seasonally adjusted basis. The estimated advance in employment from December to January was revised slightly upwards to 173,000 from the initially reported 170,000. Employment in the private, service-providing sector rose 170,000 in February, and employment in the private, goods-producing sector increased 46,000 in February.  Manufacturing employment increased 21,000.
Employment on large payrolls—those with 500 or more workers—increased 20,000, and employment on medium payrolls—those with 50 to 499 workers—rose 88,000 in February. 
Employment on small payrolls—those with up to 49 workers—rose 108,000 that same period. Of the 108,000 jobs created by small businesses, 18,000 jobs were created by the goodsproducing sector and 90,000 jobs were created by the service-producing sector. Employment in the construction industry grew by 16,000 in February, marking the fifth consecutive monthly gain in this sector. Employment in the financial services sector increased 14,000 in February, marking the seventh consecutive and largest monthly gain over the last two years.

News Item

02/01/2012   January 2012 Employment Report

January 2012 ADP National Employment Report

 
Employment in the U.S. nonfarm private business sector increased by 170,000 from December to January on a seasonally adjusted basis. The estimated advance in employment from November to December was revised down to 292,000 from the initially reported 325,000.
Employment in the private, service-providing sector rose 152,000 in January, and employment in the private, goods-producing sector increased 18,000 in January, while manufacturing employment increased 10,000.
Employment on large payrolls—those with 500 or more workers—increased 3,000, and employment on medium payrolls—those with 50 to 499 workers—rose 72,000 in January. 
Employment on small payrolls—those with up to 49 workers—rose 95,000 that same period. Of the 95,000 jobs created by small businesses, 11,000 jobs were created by the goods-producing sector and 84,000 jobs were created by the service-producing sector. Employment in the construction industry increased 2,000 this month, which is down from an increase of 27,000 in December.  Employment in the financial services sector increased 9,000 in January, which is up from an increase of 1,000 in December, and represents the largest gain in two years.

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Featured Property

Asking Price:
 
$899,000

Refund Amount:
$11,238

City:
Lexington

Square Feet:
3,081

Bedrooms:
4

MLS#:
71766483