Tennessee, Oregon, and the State of Real Estate

by Jeff Kempe

Realtor, Associate Broker

Author website

This started as a reply to Greg’s post on the Tennessee legislature, which apparently insists going backward is the new going forward. But then I had The Conversation, and it’s developed into a post of its own.

Involved is someone I respect, a friend, a mentor, perhaps the one person more responsible for getting me into real estate than anyone. In the business over twenty years, he knows RE law better than most principal brokers, and has helped me enormously in the first three years I’ve been around.

Oregon is one of the eleven states that has a “Thou shalt not share commission!” law, passed at least fifteen years ago, notwithstanding Glenn Kelman’s Sixty Minutes inference that it was all about him. I wanted to know why it was passed in the first place: Assuming consumer protection against graft or corruption, I couldn’t figure out how that worked. The answer dumbfounded me:

“That protects us, our commissions. I’m glad it’s there.”

Oh, dear. Thank you for the candor. Elaborate?

“Look, I know you’re a free market kind of guy, but there’s nothing wrong with laws protecting us from consumers. People try to hack away at my commission every day on the listing side. This prevents the same kind of hacking on the buying side.”

Wait. Aren’t you worth the commission you charge? “Of course. That’s my point.” Then when someone asks you to cut your commission, what’s wrong with: No. Why do you need a law, especially a law that reinforces the public perception that we’re all self absorbed troglodytes?

“Twenty years ago, before the internet, we didn’t have that reputation. Now 80% of transactions don’t even really need a buyer’s agent.”

Say what?

It went on, defensively and testily. The internet’s the problem, we’re the victims. When I brought up separating buyer commission from listing commission, he said he hoped he was well out of the business before that happened.

It’s occurred to me: his opinion isn’t an anomaly; as I said here the biggest problem we face as an industry is our industry. I can’t begin to get my mind around treating clients as adversaries, but the “Buyers are liars!” meme is constant. (I’ve run into it only once in three years, when I gently suggested she find new representation.) A seriously uncomfortable percentage of our peers think doing it the same way it’s always been done is the only way, that it’s us vs them, that suggesting anything else is heresy. By definition, according to my friend, I’m a pariah.

I only know this: it’s not twenty years ago. And it never will be again.

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