Kickbacks are coming to bite portals

“A key element of this model is that leads are qualified before being handed off to a partner agent. Leads are called directly by the portal, typically within minutes of submitting a form. The second key element of next-gen lead gen is the use of a commission share, or success fee, model. If a lead transacts, the agent pays a percentage of their commission back to the portal. The commission share varies by market, but is generally around a third of an agent’s commission. And this source of revenue accounts for an increasing share of portal revenue; Realtor.com ReadyConnect (Opcity) generates about a third of its lead gen revenue from the commission share model, as does ImmoScout24. A win for consumers, portals and (some) agents Next-gen lead gen lays the groundwork for a triple win: the promise of a better consumer experience, less wasted time for agents and a more valuable product for portals. The potential downside of next-gen lead gen programs lie in their exclusive nature. It’s not for everyone; agent networks consist of a small and exclusive group of the total agent pool. Over the long term, the agents not participating in these programs will receive fewer online leads and may be at a significant competitive disadvantage in the race to acquire customers. Next-gen lead gen is revolutionizing the portal lead gen business model, but it only works for the agents who jump on board”

Nice try, but no cigar. Broker collusion and kickbacks in housing sector are are outlawed in the United States. The basis for damages to consumers are: 15 U.S.C. §1 — Trusts, etc., in restraint of trade illegal; 12 U.S.C. §2607 — Prohibition against kickbacks and unearned fees; 12 C.F.R. §1024.14 — Prohibition against kickbacks and unearned fees; 15 U.S.C. §45 — Unfair methods of competition unlawful; Local Business and Professions Codes and State Commerce Regulations.

Major antitrust fines are coming to the broken real estate sector, including Zillow Flex, Redfin Partner Program, HomeLight, Better Real Estate, Opcity (obviously), Xome, mellohome, Rocket Homes, OJO Labs, Opendoor Brokerage, Landed, Tomo Brokerage, Blend Realty, and similarly situated consumer brokering scams. These things are all dead on arrival, as far as I can see.

US #Realtors should get ready for the fallout from kickbacks and price fixing into open market competitive savings.

Open competition between #Realtors is not a choice — its a federal law.

#antitrust #kickbacks #allocation #pricefixing #realestate #realtors #shellbrokers #collusion #shermanact #ftcact #respa U.S. Department of Justice Federal Trade Commission National Association of REALTORS® Consumer Financial Protection Bureau

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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