“Clever Real Estate is platform connects consumers with over 12,000 vetted real estate agents. The company negotiates discounted rates, making it easier to compare and interview agents. Listing fees are 1%, far lower than the typical 2.5% to 3% that is the industry standard, the company said.”
Price fixing of Realtor commissions is a felony in the United States. By definition, it inflates commissions and reduces the quality of service.
Just so we are all clear on what Clever Real Estate is — 12,000 random Realtors are colluding with a “shell” brokerage, where all of them openly engage in a felony punishable by, for corporations, a fine of up to $100 million, and for individuals, a fine of up to $1 million, or 10 years imprisonment (or both).
In addition to receiving a criminal sentence, a corporation or individual convicted of a Sherman Act violation may be ordered to make restitution to the victims for all overcharges. Victims of price-fixing conspiracies also may seek civil recovery of up to three times the amount of damages suffered. In this case, it is the government’s responsibility to enforce the law and to charge all conspirators with a crime, including Clever Real Estate, Cultivation Capital, The Mortgage Collaborative and the 12,000 Realtors in this network.
Clever Real Estate is one of the smaller “partner agent” price fixing scams, compared to the Opendoor Brokerage, Realtor.com Opcity, Blend Realty, Xome, UpNest, or Better Real Estate, but it makes for the most obvious case for price fixing, making it an easy target for antitrust and wire fraud enforcement.
Disrupting these scams is one of the greatest challenges in the online real estate sector right now, but also one of the greatest opportunities to deliver genuine savings to consumers from properly negotiated commissions offered by law-abiding Realtors.
How prevalent is collusion in online real estate?
For example, Redfin has about 1,500 agents on payroll, but it colludes with over 11,000 Redfin Partner Agents from random competing brokerages. Over 40% of all Redfin transactions are farmed out to competitors. Clever Real Estate has exactly zero agents on payroll, where 100% of all transactions that pass thru this scam are a product of collusion supported by wire fraud and bad VC capital.
#realestate #antitrust #kickbacks #wirefraud #pricefixing #allocation #shermanact #ftcact #respa U.S. Department of Justice Federal Trade Commission Consumer Financial Protection Bureau