The Honorable Phil Bredesen
Governor of Tennessee
Tennessee State Capital
Nashville, TN 37243-0001
by mail, email: phil.bredesen@state.tn.us , and fax 615-532-9711

Dear Governor Bredesen:

We are writing you on behalf of Tennessee homeowners to urge you to veto HB 2095/SB 1160, which would prohibit Tennessee home buyers from receiving real estate commission rebates . Commission rebates of up to 2% of a homes selling price are increasingly popular with homeowners across the country. Commission rebates are working well-consumers using them have not experienced problems. They are enabling more consumers to become homeowners and are helping offset declining or stagnant home values in many parts of the country.

With the average U. S. home selling price now more than $200,000, denying a commission rebate of  up to 2% will cost Tennessee home buyers who want to take advantage of that opportunity more than $4,000 in many cases. In effect, the law would serve as an equity stripping tool benefiting traditional real estate  brokers at the expense of your constituents.

A May 13 CBS 60 minutes segment on real estate competition documented the potential savings for consumers through real estate commission rebates as well as efforts by traditional real estate brokers to prohibit their competitors from offering rebates in order to protect their commission revenues. The transcript of of the segment is here.

The U. S. Department of Justice (DOJ), the Federal Trade Commission (FTC), the Consumer Federation of America and my own organization support allowing real estate brokers to provide commission rebates to home buyers. Even the conservative pro-business publication Wall Street Journal publication strongly condemned the anti-competitive efforts of the real estate trade  associations . We understand that DOJ identified the problems with this legislation in the Department’s May 12, 2007, letter to House Speaker Naifeh.

On behalf of our Tennessee members, we urge you to put the best interests of  your constituents first and veto HB 2095/SB 1160.

Thanks for your consideration.

Sincerely,

Bruce N. Hahn

President

American Homeowners Grassroots Alliance

Stephen Brobeck

Executive Director

Consumer Federation of America