Consumer Advocates Seek to Protect Oregon Home Buyers

Today OSPIRG and the Consumer Federation of America (CFA) are filing an amicus brief in the Oregon District Court supporting a lawsuit challenging an Oregon law that prohibits real estate agents from offering rebates to home buyers.

“The Oregon law restricts price competition and harms consumers,” said Charlie Fisher, OSPIRG State Director. “Real estate agents representing buyers should have the ability to rebate a portion of their 2.5–3.0 percent commission to their clients,” he added.

Forty states and DC allow these buyer rebates, which represent a return to home buyers of some or all of the increase in home price that covers the buyer agent commission. “Four major lawsuits are now challenging the inability of home buyers to negotiate buyer agent commission paid by home sellers,” said Stephen Brobeck, a CFA senior fellow. “Prohibiting buyer rebates reinforces high and uniform real estate commissions,” he added.

Consumers pay an estimated $100 billion in real estate commissions annually, typically 5–6 percent of the sale price. According to Novato Real Estate, in November 2020 the typical Portland home sold for $500,000, representing commission costs of $25,000 to $30,000.

In neighboring Washington State, buyer rebates are permitted and used by consumers. One rebater, Redfin, participated in an estimated five percent of Seattle home sales in 2016. Recently this company offered buyers an average refund of $3,500. REX, plaintiff in the Oregon…