Board Allows Real Estate Brokers to Offer Rebates to Consumers

By Beacon Staff

HELENA – The Montana Board of Realty Regulation has voted to repeal a rule that bars real estate brokers from offering rebates and other incentives to their customers, the U.S. Department of Justice announced Tuesday.

The decision was made in response to an investigation by the department’s Antitrust Division, the agency said in a news release. Calls to the board’s Helena office Tuesday evening were not answered.

According to the Justice Department, the board voted to delete language from the Administrative Rules of Montana that said holders of real estate licenses may not “solicit business by offering gifts, rebates or promotional items.”

The change will benefit consumers seeking real estate services in Montana by eliminating a key impediment to competition between real estate brokers, the agency said.

The amended rule approved Tuesday also clarifies that the payment of a rebate to a buyer or seller in a real estate transaction is not an unauthorized payment of a commission to an unlicensed person, the release said.

“Amending this rule to allow rebates in real estate transactions is a good change for Montana consumers,” said Thomas O. Barnett, assistant attorney general in charge of the department’s Antitrust Division. “As we have consistently seen in other states, the repeal of rebate bans lead to increased competition between brokers and lower prices for consumers of real estate brokerage services.”

The Justice Department says it began its investigation after the Montana Board of Realty Regulation voted in August to prohibit licensees from offering gifts, rebates or promotional items.

In most states, brokers can offer to rebate a portion of their commission to consumers, or offer other non-cash incentives, to get clients seeking to buy or sell homes, the release said. Montana’s rule banned this form of competition between real estate brokers.

West Virginia, South Dakota and Kentucky also have recently repealed antirebate regulations in response to concerns raised by the Justice Department, the release said.

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