Why this broker-to-broker collusion scam and not Rocket Homes, or Zillow Flex, or Opcity, or OJO Labs, or Ramsey Solutions, or Estately?
Opcity has a much greater reach via Realtor.com
Rocket Homes collects kickbacks via the Rocket Mortgage channel, the largest non-bank lender in the United States.
Zillow Flex is tied into Zillow, be that as it may, on a limited scale, waiting to see if Opcity route is a sand trap or a hard rock gold mine.
There are many collusion scams out there, however, HomeLight remains number one among these for three simple reasons:
(1) HomeLight allocates consumers on the compounded basis of lies: all brokers charge standard commissions, all referral fees are standard, brokers don’t pay HomeLight to be listed, HomeLight’s limited pool of colluding brokers is unbiased, etc.
(2) HomeLight serves to a risk-averse consumer: “if I am going to overpay for exigent broker commissions, I may as well hire a second broker in collusion for the price of one.” A flawed argument, legally and economically, but that is how and why HomeLight functions.
(3) HomeLight has built the entire product based on kickbacks. This scheme has taken over $5 billion in kickbacks from consumers in all 50 states and Washington DC since inception. For example, on a home sale of a $4 million, a consumer would end up paying about $60,000 in kickbacks to HomeLight. If HomeLight was to propose to someone the idea of paying $60,000 as a direct transaction payment to recommend a colluding broker, I very much doubt that there would be any takers. The scheme only works because the $60K fee is hidden and backloaded into an inflated commission received by the colluding broker.
Eventually, all scams fail, but that does not mean that we cannot learn from these failures.
We CAN and SHOULD learn from these scams and we CAN and SHOULD build better products from this knowledge. Consumers systematically use HomeLight because they need answers to very difficult questions. How do I hire the right Realtor right now?
There is a real need for transparency and clear-cut information in the housing sector. There is a real need to offer consumers a viable genuine unbiased match with the best and the most competitive local Realtor. To ignore these needs is to ignore the consumer.
The hard question is: how do we serve consumers to meet these needs as an unbiased and legal media service?
The real answer is simple.
Brokers cant rate other brokers and brokers cant collude with brokers. A genuine marketplace, however, can rate brokers and can deliver billions in aggregate savings to consumers. A an Open Marketplace is the answer.
#consumers #bigtech #antitrust