Illinois Preparing for Rebate Battle

Jonathan Dalton, Phoenix Real Estate AgentFollowing the lead of Tennessee and others, Illinois’ legislature this session will be considering a bill that would prohibit real estate companies from providing cash rebates to their buyers and sellers at the successful close of a real estate transaction.

Rep. Robert Molaro (D-Dist. 21) on January 9 filed HB4314, which says”that no licensee shall give or pay cash rebates, cash gifts or cash prizes to an unlicensed person who is a party to a contract to buy or sell real estate.”

This morning I spoke to Ken Lapinski, a spokesman for Rep. Molaro. He said the Illinois House has been on recess and is not due to reconvene until next week and that he had not yet discussed this particular bill with Rep. Molaro. More information, he said, should be available late next week.

Assuming (and probably safely) that this bill is supported by the Illinois Association of REALTORS, it’s another example of NAR and the state associations attempting through legislation to do what the free market ought to do – determine the fate of rebate-based companies such as Redfin.

(NAR, as Glenn Kelman points out, has tried to distance itself from the actions of the state associations. Yet I also believe if there weren’t a DOJ lawsuit sitting out there, it wouldn’t be beyond NAR to attempt such a move on a national basis, or at least orchestrate it.)

It should be remarkably clear that I’m not a supporter of Redfin, the Seattle-based flat rate/rebate real estate brokerage, not because of its business model but because of its approach. Positioning yourself as something new when it’s a warmed over, decades-old business model, all the while taking pot shots at the establishment to which you are so deeply rooted despite all claims to the contrary … it’s disingenuous, to say the least.

Apparently Voltaire actually didn’t say this, but nevertheless … “I disapprove of what you say but I will defend to the death your right to say it.” While I’m no fan of the reduced service/rebate model, I fully believe in its right to exist. The market will dictate whether it’s able to survive.

But retreating back to yesterday’s discussion of Thomas Paine, few in the political world understand the beauty of a void – be it politicians or lobbyists whose associations attempt through policy would they’re unsuccessful in creating through force of their own skill.

I don’t support rebate models but I also don’t fear them. If ever introduced here, I would decry a rebate prohibition from Piestewa Peak to the White Tanks. It’s simply bad policy – interference in free markets where none really is necessary.

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at