A couple of years ago, I looked down at the caller ID on my phone and saw a California area code. “This is Charles.” “I am moving to Oregon and looking for an agent. I will expect a 2% rebate of your commission.” “Commission rebates are legal in California but not in Oregon. I can’t do that.” “I’ll find a Realtor that will.” Click (he hung up on me). Unfortunately, he probably did find an unethical Oregon Realtor willing to do it.
Oregon Statute 696.290 (in part): Sharing compensation with or paying finder’s fee to unlicensed person prohibited; exceptions. (1) A real estate licensee shall not offer, promise, allow, give, pay or rebate, directly or indirectly, any part or share of the licensee’s compensation arising or accruing from any real estate transaction or pay a finder’s fee to any person who is not a real estate licensee licensed under ORS 696.022.
Thirteen states use some variation of this law. The Department of Justice sued Kentucky and I don’t know where it stands in the judicial system.
I don’t know if the model is flawed or not. I think it can be argued either way. It is clear that it isn’t perfect and I think the model will change to where the listing agent is paid by the seller and the buyer’s agent is paid by the buyer. Everyone can negotiate their rates and everyone will be under contract and you’ll see less dual agency. It doesn’t make sense that somebody I don’t know, have never talked to and may never meet can determine what my services are worth. Without a buyer/broker (buyer service) agreement that is exactly how the current model works. The current model though has such an aversion to buyer broker agreements that it prevents a new model from gaining traction.