Save time. Save stress. Save thousands. Very quietly, Zillow just began to price fix services of random #Realtors via Zillow 360 program.
“If you obtain a purchase mortgage loan from ZHL and use a participating agent for the purchase of your next home, you can qualify for a closing cost credit amounting to 0.6% of your loan balance (subject to a $5,000 cap) and a cash rebate amounting to 0.5% of the purchase price of your new home (subject to a $5,000 cap) (collectively, the “Incentives”). Total Incentives are advertised at $7,000 to reflect the typical home values in affected markets but may exceed $7,000. Total Incentives are capped at $10,000 in the aggregate.”
Of course, each Realtor must define their own pricing and offer rebates to compete for consumers directly. This scheme, is an extension of Zillow Flex mechanism. Similar mechanism, Client Rewards, is currently mandated by Realtor.com-Opcity where the shell brokerage establishes the refund an agent must provide to receive a referral. The true intention of Opcity and Zillow Flex 360 is to motivate the consumer to use the network, despite the hidden kickbacks.
Interestingly, Zillow was always built on a lie that “buyer agents work for free” where all buyer agents would pay to advertise services against new listings. This new price fixing scheme is certainly a big deviation from that methodology, and, of course, a flawed approach to open competition between real estate professionals.
In the meantime, Rich Barton has just committed a felony. Price fixing of #Realtor services outside of their firm is a per se violation of the Sherman Antitrust Act and it carries a ten-year prison sentence.
Price-fixed cash rebate amounting to 0.5% of the purchase price of a home is severally underpriced in order to accommodate the hub-and-spoke conspiracy where the buyer receives about 15% rebate from the partner agents’ commissions, while Zillow pockets over 35% as a hidden kickback.
On the open market, a buyer is able to receive tens of thousands more in rebates when the amount is negotiated competitively. Commission kickbacks and commission rebates are the same exact money, ending up in two very different pockets.
Zillow 360 price fixing scheme is currently live in Austin, TX; San Antonio, TX; Dallas, TX; and Houston, TX.
The reason why HomeOpenly is built in legal compliance is so that we can disrupt the industry, truly disrupt it, rather than to offer a price-fixed rebate gimmick or some form of collusion in exchange for hidden kickbacks.