Compare Clever Real Estate and Blend Realty
For Sellers
For Buyers
For Buyers
Answer: Both Clever Real Estate and Blend Realty function as a referral fee network that enables broker-to-broker collusion with use of blanket referral agreements.
Buying and Selling with Clever Real Estate
WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.
Clever 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.
Clever Real Estate is a referral fee network designed to collect fees by matching consumers with local real estate agents willing to pay it. Clever Real Estate operates as a licensed real estate brokerage in Missouri under License #2017042277, but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State.
When consumers submit information to Clever Real Estate, this information is simply shared in exchange for an undisclosed fee with real estate agents in a process known as a "blind match."
Clever Real Estate Pricing
Clever Real Estate revenue comes from undisclosed referral fees. Referral fees set by such networks range anywhere between 25%-40% of the entire agent’s commission.
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
Clever Real Estate Editor's Review:
Clever Real Estate is a referral network that claims it does not endorse, validate, or recommend any legal agreements between homeowners and buyers and real estate professionals, but we find these claims to be false.
Using its website, Clever Real Estate engages in a process known as price fixing because it sets listing rates and rebates for independent real estate professionals using the network.
Clever Real Estate sets a flat listing fee of $3,000 for homes sold under $350,000 and 1% listing fee for homes sold over that amount; for home Buyers Clever Real Estate sets a 1% rebate. 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 other brokers across the United States, Clever 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.
Consumers using this 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 referral fees.
Why Price-Fixing Damages Consumer Experience
Clever Real Estate claims to connect consumers with an agent who will charge $3000 or 1% of the home, and that their "service" is free. First of all, Clever Real Estate is not free, their fees are simply hidden within a referral fee that the agent will pay after the transaction.
More importantly, price-fixing is an uncompetitive practice, and every agent who participates with Clever 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.
Antitrust laws are essential for real estate professionals. Real estate professionals customarily operate in cooperation and competition with one another, a practice that presents a host of opportunities for antitrust violations. In reality, it is easy to comply with antitrust laws. Agents simply need to be aware of the rules and take care to conduct business lawfully.
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 Clever Real Estate and any broker they refer you 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.
Agents must never agree on commission rates or rebate amounts with any outside party. Agents must take care to avoid even the implication that they have discussed or reached an agreement about their service fees, service offerings, and rates due to any outside influence.
Commission rates should never be fixed through collusion. All commissions and rebates must be set by each real estate agent individually and may only be negotiable between the consumer and the real estate agent.
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 Clever Real Estate (the money it receives for your information) are "blanket" fee agreements.
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 Clever Real Estate business model – brokers (yes, Clever Real Estate is a broker) work to steer 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.
While Clever 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.
The true VALUE of any real estate agent is their ability to negotiate honestly. If an agent is unwilling to negotiate competitive terms in compliance with the law, there is no reason for consumers to assume that they will be willing to negotiate competitively when it comes to their home purchase or a home sale.
Why Does Clever Real Estate Engage in Price Fixing?
Clever Real Estate is a price-fixing and a consumer allocation scheme between licensed brokers. All price-fixing agreements are illegal "per se" regardless of whether they are reasonable or not. Whatever economic justification particular price-fixing agreements may be thought to have, the law does not permit an inquiry into their reasonableness. They are all banned.
Clever Real Estate engages in price-fixing because it needs a "dangling carrot in front of consumers" to "reasonably" justify the kickbacks it takes from the brokers who patriciate in the scheme. This dynamic is better known as a hub-and-spoke conspiracy. Clever scheme produces absolutely no tangible service as a licensed broker to anyone and instead delivers either inflated prices, lower quality of service, or, more likely, both. The scheme originates as a conspiracy to restrain trade and to funnel consumers toward the scheme and away from the open market. There are hundreds of thousands of highly competitive Realtors® who offer great savings and great service, and they refuse to pay kickbacks or to comply with the price fixed rates set by Clever.
The kickback is the principal origination point for Clever Real Estate. The kickback is the reason why Clever sets listing commission rates and buyer rebates for Realtors® outside their firm. ALL consumers and ALL legitimate Realtors® are scammed by Clever Real Estate, even if the experience and savings may seem "good enough" because price-fixing is a faulty shortcut to genuine open competition between Realtors®. By law, all Realtors® must compete for consumers and set prices individually. Open competition is at the core of our free and independent society everywhere in America.
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. ALL Realtors® who participate in the Clever Real Estate scheme are engaged in price-fixing. 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. 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.
The prices set by Clever Real Estate are not for the services that they offer, but for services offered by their direct competitors – other brokers. When Clever Real Estate refuses to compete with these brokers and instead organizes "partner agents" into a network, it breaks an entire host of basic principles that guide our open and fair markets. Moreover, Clever brokerage, which is based in Missouri, extends this conspiracy all across the United States, making the scheme highly damaging due to the scaled use of the Internet to transmit collusion. The Internet, like any other scaled information medium, can be used to transmit competition just as easily as collusion.
The short answer is: Clever Real Estate's intent to fix prices is directly tied into the 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. Kickbacks cost thousands in open market savings lost to consumers.
Where does Clever Real Estate operate?
Buying with Blend Realty
WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.
Blend Realty) 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.
Blend Realty is a paper brokerage that operates a consumer allocation and a price fixing scheme designed to collect referral fees by matching consumers with local real estate agents willing to pay it. Blend Realty operates under a variety of broker licenses, mainly California DRE license 02101769 issued to Blend Brokerage, Inc., but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State. In exchange for matching consumers with an Blend Realty Partner Agent, Blend Realty is compensated by the Partner Agent with 20% cut of their commission. The broker advertises their scheme to Partner Agents as a service where “Buyers have been approved by our network of lenders. No cost to join. No obligation. No upfront fees. No setup fees. No marketing fees. Pay 20% upon a successful closing.
Blend Realty Pricing
Blend Realty revenue comes from the use of blanket referral agreements with random real estate brokers. Blend Realty is a broker-to-broker collusion scheme that scrubs consumer’s information from their network of lenders and passes it along to a colluding broker who is willing to pay for it with a 20% cut of their commission. Blend Realty’s blanket referral agreements further require colluding brokers to price fix their rebates at 1% of the total home purchase amount refunded to their homebuyer from the Buyer’s Agent Commission (BAC) received. This amount can also be expressed as a 30%-40% buyer commission rebate from what is typically a 2.5% to 3% BAC offered to the buyer’s agent by the home seller.
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
Blend Realty Editor's Review:
For consumers, Blend Realty promises a real estate agent “concierge” platform for top local real estate agents. By gathering consumers’ home preferences and budgets while shopping for a mortgage, Blend Realty scrubs users' information and feeds it into their network of real estate brokers. According to Blend Realty Privacy Policy:
"We collect information for the purpose of connecting you with a real estate agent as part of your home shopping experience. We may connect you directly with a real estate agent or a Broker that maintains a network of agents who will connect you with a real estate agent in their network. We may share the information you provide with, and/or make that information available to, real estate agents, Brokers and/or their successors-in-interest in order to facilitate the process of providing the service you request from us""
"We pre-qualify buyers, filter out the tire-kickers, and connect you with motivated buyers that have a qualification letter from our network of lenders"
For real estate professionals, Blend Realty promises a “no upfront costs” led generation by scrubbing consumers’ information when they shop for their mortgage with various lenders. "These are broker to broker referrals and our buyers have been approved by our network of lenders. The buyers are ready to go house hunting," says the company in their promotional material in their attempt to lure in brokers. Once a potential homebuyer is identified, a Blend Realty initiates a transfer to the Partner Agent. Blend Realty representatives give Partner Agents all the background information on the homebuyer to make the transition as warm as possible.
In other words, Blend Realty is a consumer allocation scheme that scrubs consumer’s information and passes it along to a broker who is willing to pay for it with a cut of their commission: “Never pay for a buyer upfront, only at closing.” If a broker is unwilling to give a portion of their commission to Blend Realty, or to engage in plain price fixing with another broker, the company has no interest in recommending them. Blend Realty further takes no responsibility for any of the actions of the brokers that they allocate to consumers.
"Blend Realty is a separate entity from Blend Labs, Inc. (“Blend Labs”) where you may have previously applied for a residential loan or mortgage. The Service facilitates the process of collecting and providing your information to real estate brokers (“Broker” or “Brokers”), for the purposes of connecting you with a real estate agent. The Service also facilitates the process of collecting and providing your information to moving services including, but not limited to, moving companies, address updating services, and home phone, cable, and internet providers (“Moving Services”)."
"Blend Realty has no control over, and assumes no responsibility for, the content, accuracy, privacy policies, or practices of, or opinions expressed in, any third-party or Broker websites or by any third-party or Broker that you interact with through the Service. In addition, Blend Realty will not and cannot monitor, verify, censor, or edit the content of any third-party or Broker website or service. By using the Service, you release and hold us harmless from any and all liability arising from your use of any third-party website or service."
In effect, Blend Realty is a self-serving scheme designed to funnel consumers toward brokers who pay them a kickback at the close of consumers’ transactions. Consumers using Blend Realty have zero control over what agents the company shares their information with. Instead of being “scrubbed” and “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 referral fees.
Price Fixing
Agents must never agree on commission rates or buyer rebate amounts with any outside party. Agents must take care to avoid even the implication that they have discussed or reached an agreement about their service offerings, buyer rebates, and/or listing rates due to any outside influence, especially with another broker.
Broker compensation fees must never be fixed via agreements between two or more brokers anywhere in the United States. All commissions and rebates must be set by each real estate agent individually and may only be negotiable between the consumer and the real estate agent.
Genuine 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. If an agent is unwilling to negotiate competitive buyer rebate terms in compliance with the law, there is no reason for homebuyers to assume that they will be willing to negotiate competitively when it comes to their home purchase.
More importantly, in the United States price-fixing is an illegal uncompetitive practice, a felony, outlawed by the virtue of Section 1 of the Sherman Antitrust Act.
Consumer Allocation
Blend Realty is a broker-to-broker collusion scheme. All Partner Agents agree to pay Blend Realty a pre-arranged referral fee, on all closed transactions, through their employing broker. A referral agreement between Blend Realty and a Partner Agent for a random transaction that may or may not happen sometime in the future is executed in advance.
Blend Realty engages in consumer and market allocation agreements with Partner Agents brokerages, because it is a broker itself. Instead of representing consumers to help buy and sell homes, this “paper” brokerage actively disengages from its licensed activities so that every Partner Agent knows that Blend Brokerage, Inc. will not compete with them. Blend Realty does not act in a real estate brokerage capacity, instead, their real estate license is used to collect a blanket referral fee from the largest number of brokers possible.
Sherman Antitrust Act effectively requires all active real estate brokers to proactively compete for consumers. An agreement or an understanding between brokers not to compete for a mutual benefit is a "per se" violation of antitrust regulations in the United States.
The amount of a referral fee between brokers must be negotiated with respect to an individual transaction. It is a per se violation of the Sherman Antitrust Act for real estate brokers to agree on a “standard” referral fee that will be paid for producing a client. Real estate professionals are not allowed to enter into blanket referral agreements between one another because such agreements always restrict free trade.
Brokers are not allowed to organize their operations into any collusion schemes and networks, and instead, all brokers must compete for consumers on a fair playing field. Legitimate agents who choose NOT to engage in the Blend Realty “no upfront costs” scheme are harmed as well because consumers are steered away from them in a highly competitive real estate market.
Kickbacks and Unearned Fees
RESPA, among other things, is designed to prohibit abusive practices such as kickbacks and referral fees between mortgage companies and real estate brokers.
The statutory exemption for a payment to a cooperative brokerage and referral arrangements between real estate agents and real estate brokers requires all agents to compete against one another. To comply in good faith with RESPA (12 U.S.C. 2607) Section 8 exception for cooperative brokerage and referral arrangements, legitimate real estate agents must render referral agreements in a particular instance for a particular transaction.
Actions of Blend Realty “paper” brokerage directly increase the costs of owning homes in the United States due to added blanket referral fees, consumer allocation practices, price fixing, and reverse completion between brokers. Partner Agents in the scheme have no incentive to compete for consumers individually with lower fees, instead, they have an incentive to compete for Blend Realty’ attention. In this scheme, both colluding parties benefit from offering consumers higher commissions. Blend Realty promotes Partner Agents as somehow “superior” to those outside of the network, thus limiting free-market competitive forces and steering consumers in self-interest toward a network of very few agents who chose to agree to participate in the scheme.
Similar attempts to by-pass RESPA prohibition against kickbacks by means of delivering a “service” of a “paper” brokerage to a home lender are not new, specifically Better.com, HomeStory, and Rocket Homes all utilize blanket referral agreements to by-pass RESPA.
Blend claims that if offers “a digital lending platform that supports and simplifies applications for mortgages, consumer loans, and deposit accounts” and that “its Digital Lending Platform is utilized by Wells Fargo, U.S. Bank, and over 285 other leading financial institutions to acquire more customers, increase productivity, and deepen customer relationships.”
In the real world, Blend and Blend Realty are a single company, both designed and built with massive VC capital to rake hidden fees, by-pass RESPA, collude with independent brokers for a cut of their commissions, and openly price-fix services of others.
The entire RESPA prohibition against kickbacks was enacted specifically to stop mortgage companies from entering into “symbiotic relationships” with real estate brokers. Blend Realty 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.
As an active licensed brokerage, Blend Realty owes absolutely no duty of care to consumers, takes no responsibility for the transaction, and does not help consumers to buy homes - all despite receiving a direct financial benefit from the home purchase completed by the homebuyer.