OpinionIndustry News

Rebate ban chokes competition

Perspective: Tennessee law precludes buyer-negotiated commissions

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Protectionist. That's the ugly word that comes to mind with respect to a new law in Tennessee that bans cash rebates to buyers and sellers in real estate transactions. Tennessee Gov. Phil Bredesen signed the ban into law this month at the behest of the Tennessee Association of Realtors and despite opposition from the U.S. Department of Justice. The new law is but the latest salvo in an ongoing battle over real estate rebates in Tennessee and other states. While Tennessee's new law attempts to sidestep the issue by placing a ban on only "cash rebates, cash gifts or cash prizes," but not other inducements from the broker to the buyer, any sort of ban on rebates is all the same problematic since it serves only to protect entrenched industry interests at the expense of home buyers and new competitors. What's ridiculous about Tennessee's approach is that a ban against cash rebates, gifts or prizes can't possibly achieve any purpose as long as other noncash rebates, gifts and prizes are per...