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States With Minimum Service Laws

 

Which states have enacted minimum service laws?

Twelve states and the District of Columbia require consumers to purchase more services than they may want, with no option to waive the extra services. Those states are:

  • Alabama
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Missouri
  • Oregon
  • Texas
  • Utah
  • Washington
  • West Virginia

An additional eight states have minimum service requirements but allow consumers to waive those extra services, preserving choice. Those states are Delaware, Florida, Nevada, New Mexico, Ohio, Pennsylvania, Tennessee, and Wisconsin.

How do minimum service laws work?

Minimum service provisions are laws or regulations that dictate the services that a consumer must purchase when entering into a relationship with a real estate broker. They do this by requiring real estate brokers to provide a bundle of services whether the consumer wants to buy all of them or not. In states with such provisions, brokers cannot agree to provide consumers with less than the required services.

While many consumers do want to buy all the services these provisions require a broker to provide, other consumers prefer to save money by performing some services themselves.

Discount Brokers Can Make Selling a Home Less Costly

Traditional brokers face increasing competition from fee-for-service brokers who charge only for those services the consumer actually buys. Consumers with the option of choosing a fee-for-service broker can save thousands of dollars by purchasing only those services they need.

Consumers can save thousands of dollars in commissions

Certain States Require Consumers to Purchase Brokerage Services

A number of states have enacted laws that require consumers to purchase brokerage services they may not want, with no option to waive the extra items. These so-called "minimum service" laws diminish consumer choice and raise the cost of selling a home.

States with "minimum service" laws