Compare Landis and Better Real Estate
For Buyers
For Buyers
For Buyers
Answer: Landis is a rent-to-own program that does not provide real estate services while Better Real Estate is a referral fee network that enables broker-to-broker collusion with use of blanket referral agreements
Buying with Landis
Landis is a rent-to-own program that purchases the home and then rents it out to you as a tenant. Landis claims to operate a one-year program for the tenants to buy the property once they can afford a down payment. A common complaint with all rent-to-own programs is an inability of the tenant to secure a loan in time to purchase the property, at which point the tenant is either forced to walk away with a loss or continues to rent.
Landis may sometimes suggest that a customer reach out to someone (e.g. a lender) who can help them, but the company doesn’t make money from it, and only gives the info to the customer, not the customer's info to anyone else. Landis does not receive any referral fees from third parties (such as lenders, real estate brokers, etc.) and keenly guards customers' information. This is a refreshing approach that adds value to consumers. Landis states that: "companies at our stage don't have any incentive to charge hidden fees: growth and customer experience simply matter much more than revenue."
Landis Pricing
Landis revenue comes from the price of rent and a 3% increase between the price of the home when Landis buys it and the price it sells it to the tenant after a year.
Landis is silent on what happens in a situation when the price of the home drops before the tenant can buy it, or if the mortgage rates increase during the tenancy period. When consumers use Landis, they are unable to take advantage of a buyer’s commission rebate from a real estate agent because the company is the one actually buying the home.
Landis states that it receives "no rebates or commissions from agents, we pay agents their full commission, as though they were working with the customer."
When it comes to the cost of rent Landis says that "we're very upfront with our users that during the 12 months of the program, we are more expensive than owning, or even renting. That's because we need our customers to put money to the side for their down payment … our only revenue is market rent and 3% appreciation at the end of the year. The economics work out because we're in areas where average rents are high."
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
Landis Editor's Review:
Landis program purchases the home and rents it to the tenant with an option to buy. Landis reviews full financial, credit, and work history of each potential tenant. Those few applicants who pass the screening may select a home within the allowed amount Landis sets. A tenant pays rent, a portion of which becomes a down payment to eventually buy the home. After a year, if the tenant decides to move out, Landis deducts half of the down payment amount saved, as an added fee. When purchasing a house from Landis, a tenant must and pay closing costs of the sale.
Landis has only enough cash on hand (structured as debt) to place offers against a handful of properties. This is why the company likely rejects the majority of applications as a way to reduce risk. It is safe to assume that only a very small number of applications with Landis are approved.
According to the company, "lenders send us customers that want to buy a home but can't close on a loan. It could be due to a low credit score, insufficient down payment, a recent bankruptcy, self-employment, or some other reason."
To secure a mortgage on competitive terms is a primary and the best option to buy a home. Yes, the down payment is difficult, but adding Landis to the mix doesn't solve the overall affordability. Landis claims that owning a home is always cheaper than renting it, but Landis is a landlord.
There is nothing to substantiate that renting a home from Landis is less expensive to own it during that same time frame. There is also nothing to suggest that Landis is offering reduced rent to the tenant at any given time. Buying a property is a risk, and Landis must account for this risk with added fees. The true costs of this rent-to-buy program are incredibly difficult to estimate by anyone other than Landis, and these costs are absolutely real.
Buyers are unlikely to receive a buyer's rebate from a real estate agent when buying with Landis program.
Buying a home is one of the most important transactions in people's lives, especially the first home. By adding Landis rent-to-own proposition, buyers are subjecting their transaction to the additional 3% appreciation fees, paying rent, and a possible loss of half of the down payment amount if moving out.
Landis receives a neutral editor's score because of several factors. When asked, the company declined to disclose its application volume and applicant success rates. Lack of this information makes it difficult to estimate the “weight” of overall operations and the returns the company is required to make against the total number of participants.
An undisputed positive is that the company doesn’t make money from referrals, making their claims to hold consumers’ best interest viable.
Landis claims that owning in the long term is cheaper than renting, especially in the markets where it operates. However, there is no clear evidence money is saved and there is no evidence that consumers who choose the Landis model end up with a higher chance of purchasing the home.
Landis states: “We completely agree that a mortgage is better. That's why we coach all our customers to do what they need to get a mortgage. It's the whole point of the company. We work with those who simply can't get a mortgage (because of credit score, down payment, etc.) and we coach them to fix what prevents them from getting one. As soon as they can get one, they graduate from the program.”
We find no solid evidence that Landis offers home buyers tangible savings as part of their rent-to-own program, but at the same time, some home buyers may decide for themselves that the program is worth the added fees.
Geodoma editorial staff remains overall neutral on the subject: we can neither recommend Landis nor suggest that buyers refrain from using the program.
Where does Landis operate?
Buying and Selling with Better Real Estate
WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.
Better Real Estate) is a broker-to-broker collusion scheme, where "partner agents" unlawfully agree to pay massive kickbacks to receive your information and engage in market allocation, consumer allocation, false advertising, unlawful kickbacks, wire fraud, and price-fixing practices in violation of, inter alia, 18 U.S.C. § 1346, 18 U.S.C. § 1343, 15 U.S.C. § 1, 15 U.S.C. § 45, 12 U.S.C. § 2607, 12 C.F.R. § 1024.14. As a consumer, you will always significantly overpay for Realtor commissions subject to hidden kickbacks and pay-to-play steering promoted in this scheme.
United States federal antitrust laws prohibit consumer allocation and blanket referral agreements between real estate companies.
Be smart; do not allow your information to be "sold as a lead" to a double-dealing Realtor in exchange for massive commission kickbacks paid from your future home sale, or your future home purchase.
Better Real Estate is a real estate broker and broker-to-broker collusion scheme designed to collect fees by matching consumers with local Realtors. Better Real Estate operates as a licensed real estate brokerage in a number of states, primarily in New York as BRE Services, LLC License #10991232130
When consumers submit information to Better Mortgage or Better Real Estate, this information is shared in exchange for an undisclosed fee with random real estate agents in a process known as a "blind match." In some instances Better Real Estate acts as an affiliate of Better Mortgage and may represent consumers directly, however, Better Mortgage and Better Real Estate services are unlawfully tied.
Better Real Estate Pricing
Better Real Estate revenue comes from buyer agent commissions and undisclosed referral fees from competing Realtors. Referral fees set by such networks range anywhere between 25%-40% of the entire agent’s commission.
Better Real Estate pricing for buyer and seller representation is impossible to determine because broker services are unlawfully bundled with mortgage services where company's offers are available "to conforming loan product customers who have (a) entered a purchase contract on a home using the Better Real Estate Agent or Better Real estate Partner Agent; and (b) closed a mortgage loan on said home with Better Mortgage Corporation."
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- Find the Property
- Recommend Other Professionals
- Attend Inspection Services
- Schedule Private Showings
- Negotiate Needed Repairs
- Closing Duties
- Accept and Deliver All Offers and Counteroffers
Better Real Estate Editor's Review:
Better Real Estate is a licensed real estate broker and a broker collusion scheme that organizes and price-fixes services of competitors in exchange for hidden kickbacks it receives from the "partner agent" commissions.
Using its website, Better Real Estate engages in a process known as price fixing because it sets buyer rebates for independent real estate professionals (Better Real Estate Partner Agents) that have agreed to participate in the scheme. According to the Better.com website, "Purchase borrowers matched with a Better Real Estate Agent may receive $2,000 in lender credits and purchase borrowers matched with a Better Real Estate Partner Agent may receive up to 1% of the home sales price in lender credits." For purposes of the present discussion, brokerage fees are always negotiable and no broker should set rates and rebates for other brokers. Each firm should establish its own policy as to its fee structure and charges, amount of commissions, and rebates. Price fixing is prohibited by federal antitrust legislation. Individual agents must never discuss, or set rates with brokers outside of their own company.
By setting rates and rebates for a network of competing brokers across the United States, Better Real Estate operates with a sole purpose to collect referral fees, where such service effectively results in lower quality of service, pay-to-play bias, and a "blind match" with agents willing to participate.
The price fixed rates established by Better Real Estate scheme are severely inflated (for buyers, the buyer rebate is severely reduced) due to hidden kickbacks. Further, these same exact "partner agents" are in collusion with Better Real Estate, therefore, they are unethical and unlikely to provide any form of honest representation to homebuyers. Consumers using Better Real Estate "partner network" have zero control over what agents the company shares their information with. Instead of being "sold as leads" consumers looking for a competitive and fair representation can consider negotiating directly with real estate agents, or with help from unbiased consumer-focused online services that do not collect kickbacks.
Better.com Price-Fixing Harms Homebuyers
Better Real Estate offers a “discount” to consumers from a blanket referral fee earned, not from a commission earned. This is a form of price-fixing and is, effectively, a kickback derived from another kickback, instead of a legal buyer's rebate mechanism.
The true intention of Better Real Estate is to motivate the consumer to use the network with a “discount” tangled as a carrot, despite the massive disadvantages of a hidden referral fee. In such a scenario, the consumer ends up grossly overpaying for their buyer's agent commission due to the hidden kickbacks between the mortgage company and the brokerage in their referral network.
Better Real Estate Partner Agents do not compete with each other in the scheme on price and level of service – they are simply farmed out to consumers. In this price-fixing scheme, Better Real Estate is not involved in a transaction of the actual home purchase. Better Real Estate LLC does not produce any tangible service to the purchaser of a home, but it merely sets up a network of brokers for its own benefit – to siphon off a cut of the buyer’s agent commission.
More importantly, price-fixing is an unlawful practice, and every agent who participates with Better Real Estate is a participant in the scheme. Saving consumers from having to pay excessive brokerage fees can never be justified with price-fixing, especially in exchange for a financial gain between brokers.
Several laws combine to form the core of federal antitrust laws, but the Sherman Act is the primary piece of these regulations. Section 1 of the Sherman Act states: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce … is declared to be illegal.” This means that (1) there must at least two parties agreeing to take action, and (2) the agreed-upon action must restrain free trade.
The parties in this case are Better Real Estate and any broker they refer a buyer to. These two independent parties are carrying out a common course of action by setting fixed commissions with the use of blanket referral agreements for mutual financial gain.
While Better Real Estate price fixes an arbitrary rate for all agents, such proposition becomes absurd when comparing home transactions worth $15 Million to home transactions worth $150,000 in different states, rural, or urban areas, variable market conditions, etc. Obviously, in some situations, consumers' interest maybe with the lowest fees, in other cases, consumers are looking for the most experienced agents, etc. Better Real Estate cannot account for these differences because the collusion scheme is not designed to deliver value, it is designed to lure consumers under a false premise for savings.
Better.com Kickbacks and Unearned Fees
Further, it is a per se violation of antitrust laws for brokers to set “standard” compensation that will be paid to other brokers. Referral fees amount paid to Better Real Estate are "blanket" fee agreements that do not comply with RESPA.
Real estate agents (only when they act in full brokerage capacity) may discuss or negotiate the referral fees concerning an individual transaction, but real estate professionals are not allowed to enter into “uniform” or “blanket” agreement on how a commission will be split, or a “standard” referral fee paid. The reason for this is exactly the premise behind the Better Real Estate scheme, where an organizer of a hub-and-spoke conspiracy steers consumers toward other brokers in exchange for a pre-arranged referral fees.
From this discussion, it becomes clear that quality and honest real estate professionals establish pricing for their services independently, and without any kickbacks. The truth is, every single agent is different, and every single agent has an individual commission structure.
The entire RESPA prohibition against kickbacks was enacted specifically to stop mortgage companies from entering into symbiotic relationships with real estate brokers. Better.com may seem like a clever by-pass of RESPA’s prohibition against kickbacks, but this loophole is built entirely on the use of blanket referral agreements between brokers designed to restrain free trade.
Better.com Tying of Services
Better Real Estate does offer brokerage services directly to consumers in some instances, but even then, these services are unlawfully tied into Better.com mortgage offerings. Better.com "savings offers" are "open to real estate agent referral customers who have (a) entered a purchase contract on a home using a real estate agent referred by Finche, LLC, dba BRE, Better Home Services and Better Real Estate; and (b) closed a mortgage loan on said home with Better Real Estate’s affiliated mortgage lender, Better Mortgage Corporation."
In this tying scheme, consumers are harmed by being forced to buy a fairly common service (mortgage origination service) to purchase a much more valuable service they want (buyer agent savings from a real estate brokerage transaction.) Consumers must be able to shop for mortgage origination services and real estate representation services independently. This tying agreement is further complicated with an unlawful price-fixing of services offered by competitors - Better Real Estate Partner Agents.
Why Better.com Colludes with Realtors?
The Realtor® commissions in the United States have long suffered from the "standard" 6% myth and the false notion that "buyer agents work for free." However, these myths cannot be resolved with price-fixing of commissions to some other level, in exchange for kickbacks. The Sherman Act imposes criminal penalties of up to $100 million for a corporation and $1 million for an individual, along with up to 10 years in prison. The actual damages are further trebled. No legitimate Realtor® will ever willingly allow themselves to be exposed to such massive liability.
The best, highly-experienced, well-educated, law-abiding, honest, and ethical Realtors® will never participate in price-fixing because it is a felony that carries massive penalties. The best Realtors® are able to recognize price fixing as wrong because they respect the true value of honest negotiations.
Better Real Estate buyer agent services and Better.com mortgage origination services are unlawfully tied. Better Real Estate engages in price fixing and consumer allocation with competitors. Why does this company do all this? This trend is a brazen new strategy used by a handful of VC-backed real estate companies, including Better.com, that are forced to deliver unreasonably high returns on billions of investments poured into them.
As of September 2021, Better.com has taken about $905 million in funding and suffers from a sky-high burn rate. To make up for this poor allocation of capital, commonly known as mega-rounds, Better.com uses a set of unlawful strategies to increase the gross revenue from mortgage origination services and real estate services by unlawfully bundling them.
The short answer is: Better Real Estate's intent to fix prices is directly tied into the massive kickbacks it receives from the "partner agents." This dynamic is archived by allocation of consumers to competitors and by the restraint of genuine competition. The "standard commissions" problem in the residential real estate sector can only be fixed legally by encouraging Realtors® to set and advertise competitive prices to consumers at scale without paying any kickbacks. All kickbacks taken by Better Real Estate are savings lost to consumers, funneled into the wrong bank account.