OpinionIndustry News

Real estate rebate ban harms consumers

Perspective: State law protects status quo at home buyers' and sellers' expense

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Picture this: A real estate agent takes a prospective home buyer around town on a house-hunting expedition. The agent shows the buyer a number of houses, and along the way, they both become hungry. They decide to stop for a sandwich and a soda. The agent turns to the buyer and says, "I'd be happy to treat you to lunch today, but I can't do it because it would be illegal." That's a joke, right? Not in Kentucky. Technically, it is illegal for a real estate agent in that great state to buy lunch for a hungry home buyer. The sandwich and soda are considered to be an inducement to transact business and such inducements, which include all types of business gifts, incentives and rebates, are illegal in the real estate business in Kentucky and to varying degrees in some other states as well. The U.S. Department of Justice and the Kentucky Real Estate Commission are investigating Kentucky's anti-inducement law – and with good reason. There may be more to this ban than meets the eye, yet ...