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Illinois Rebate Laws (listed on this page)
Believe it or not I have had to put the following information on my web site more out of necessity than for educational purposes. I have had several real estate agents tell potential home buying clients of mine that rebates were illegal in the state of Illinois! It’s amazing what licensed, dues paying members of The National Association Of Realtors® don’t know! Or should I say, what they THINK they DO know! Here is an actual e-mail my broker received after an agent viewed one of our online virtual tours. Naturally I have deleted the name of the agent and his e-mail address in order to protect the uninformed!
From: xxxxxxxxxxxxxxxxxxxx>
To: prorealtor77@hotmail.com
Subject: RE: 4250 N. Marine Dr.
Date: Sat, 31 Dec 2005 08:37:59 -0800 (PST)“Hi Michael,
I've just visited your virtual tour (with audio) for 4250 N. Marine Dr.
F.Y.I. (realtor to realtor), the "rebate" you mentioned in the audio violates Illinois Real Estate License Law.
Be Careful!
Kind Regards, xxxxxxx xxxxxxx”
Now, I must admit that this agent was very polite in his e-mail and was obviously just trying to be helpful. But how helpful would this agent have been to a client that was looking for or asking him about real estate rebates? And this is not the first time that a real estate agent, real estate attorney, loan officer, or mortgage broker has given false information about buyer’s rebates to one of my potential buyers. I have given up trying to explain to these professionals the laws regarding real estate rebates in my home state of Illinois. I now carry in my brief case printed copies of the laws regarding buyer rebates in the state of Illinois (see links listed below).
Now, before you walk away from a buyer’s rebate that could be worth thousands of dollars because some real estate professional thought they knew what they were talking about, please read the following and understand this: real estate buyer’s rebates are legal in the state of Illinois.
In my home state of Illinois the web site I direct people to is the Illinois Department of Financial & Professional Regulation. www.idfpr.com/ Once on this official state site, I tell folks to look in the navigation bar on the left and click on the link that reads “General FAQs”.
After clicking on “General FAQs”, the next page that opens will have a link that says “Real Estate FAQs”. Click on this. The next page that opens is titled “ Division of Banks and Real Estate” Real Estate Frequently Asked Questions, INTRODUCTION. Click on this. Scroll down to “GENERAL PRACTICES”. Please see line six, question number six. That question will read as follows:
“May compensation be paid to a principal to a transaction, even if the principal does not have a real estate license?”
The Answer: “Yes. Section 10-15(c) of the Act authorizes the offer or payment of compensation (“prizes, merchandise, services, rebates, discounts or other consideration”) to an unlicensed person who is a party to a contract or lease. Of course, such compensation is not required. The payment of such compensation should be pursuant to the negotiations on the transactions. The payment of such compensation is not limited to payment by a licensee to the licensee's client - in other words, a seller's agent may pay compensation to an unlicensed buyer.”
But please don’t stop there. The very next line, question number seven, will read as follows:
“May a licensee offer compensation to solicit clients?”
The Answer: “Yes. Section 10-15(d) of the Act authorizes the offer or payment of compensation (“cash, gifts, prizes, awards, coupons, merchandise, rebates or chances to win a game of chance”) to a consumer as an inducement to that consumer to use the services of a licensee, even if the consumer and licensee ultimately do not enter into a client relationship. Any advertisement under this Section must also comply with all requirements regarding real estate advertisements. Also, care should be taken not to offer compensation to unlicensed persons for referrals of clients - this is prohibited.”
This should serve to clear up any question as to real estate rebates being legal or not in my home state of Illinois!
