Compare HomeVestors and Rocket Homes
For Sellers
For Buyers
Answer: HomeVestors is a direct home cash buyer that buys select homes off-market with cash offers and resells them at a profit to homebuyers while Rocket Homes is a referral fee network that enables broker-to-broker collusion with use of blanket referral agreements
Buying and Selling with HomeVestors
HomeVestors (also known as We Buy Ugly Houses) is a franchise network where each individual local franchisee considers the condition of a home and makes an offer to pay cash for the property. In determining the offer, each franchisee discounts from the estimated retail value after it’s fully renovated.
HomeVestors Pricing
HomeVestors franchisees make money with a difference between buying and selling each home. Typically an offer equal to 70% of home value is expected from this type of sale after any cost of the repairs and resale.
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
HomeVestors Editor's Review:
HomeVestors franchisee will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After the franchisee buys the home, it renovates and resells it for a profit or rents it out to qualified tenants.
With the low offer price, comes a convenience of an all-cash closing when selling a home. HomeVestors franchisee typically closes a home in 30 days of receiving cash offer.
Typically each franchisee uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.
The main disadvantage of using HomeVestors is high losses in homeowners' equity. HomeVestors is a "heavy" model, ready to buy homes in all-cash transactions.
As any real estate investor, HomeVestors franchisee is susceptible to losing money in any given transaction. This model is prone to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip.
HomeVestors franchisee is not legally bound to represent consumers, its main legal obligation is to its stakeholders. Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home.
Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, or how much of homeowners' net equity is lost in the transaction with HomeVestors.
Today, there are a number of highly qualified real estate agents who offer competitive listing rates and flat fee listings across the United States. Unless a situation absolutely requires a quick sale, Geodoma recommends that consumers first consider using a licensed real estate agent working on competitive terms to properly list their homes on the open market before turning to HomeVestors option.
Where does HomeVestors operate?
Buying and Selling with Rocket Homes
WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.
Rocket Homes) 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.
Rocket Homes is a referral fee network designed to collect fees by matching consumers with local real estate agents willing to participate.
Rocket Homes operates as a licensed Michigan real estate brokerage Rocket Homes Real Estate LLC License 6505-346028, 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 Rocket Homes, this information is simply sold to real estate agents who are willing to pay for it with 25%-40% share of their commission.
Rocket Homes Pricing
Rocket Homes revenue comes from referral fees and sale of user data.
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
Rocket Homes Editor's Review:
Rocket Homes is a Michigan real estate broker that collects an undisclosed referral fee (estimated at 25%-40% of agent’s commission) from all real estate agents that participate. This fee makes it hardly a free service for anyone since referral fees are inevitably passed down to consumers.
More importantly, Rocket Homes is a real estate agent that “does not engage in actual real estate broker services.” Rocket Homes systematically applies pay-to-play bias towards all matching results, meaning, only real estate agents that have agreed to pay a referral fee are matched with consumers.
Rocket Homes audits all transactions because it needs to find out how much money real estate agents receive in commissions, inevitably collecting private details of consumer’s agreement for home purchase or sale.
Rocket Homes further claims to match consumers with “top-rated professionals,” but there is absolutely no third-party evidence for this. Rocket Homes Terms of Service directly states that “it does not guarantee or warrant the products or services of other product or service providers to whom it may refer you, including, but not limited to, real estate brokers/agents, lenders and escrow/settlement companies.”
The main qualification for real estate agents who participate with Rocket Homes is their willingness to pay a referral fee. Rocket Homes is an affiliated brokerage of Quicken Loans. Quicken Loans is unable to collect referral fees from real estate agents directly due to rigid RESPA regulations. Instead, Quicken Loans is using Rocket Homes’s license as a loophole to bypass RESPA provisions that were designed to protect consumers from illegal kickbacks between real estate agents and mortgage companies.
Rocket Homes suffers from an incredibly poor Privacy Policy. Company states: “we will share your personal information (such as your name, address, telephone number and e-mail) to allow third parties to contact you (even if you are previously listed on any state, federal or corporate do-not-call list) regarding their products or services that include mortgage, moving companies, telephone service providers, internet service providers, cable and satellite television service providers, and real estate agents.”
Rocket Homes plays hidden referral fees down to consumers, but it rigidly locks every participating real estate agent to the back-end of every contract. As a licensed real estate agent that doesn’t perform any real estate services or takes any responsibility for the transaction, it is not entirely clear how Rocket Homes works under the Business and Professions Code and RESPA.
Clearly, real estate agents only sign-up with Rocket Homes because the price of the referral fee can be easily incorporated into their client’s agreement with excessive commissions.
Rocket Homes receives the lowest score because it simply sells user information to third parties without any clear benefit to anyone other than itself. There are exactly zero benefits to consumers when using this referral fee network - the only effects consumers gain with Rocket Homes are hidden fees, privacy concerns and blind matches with agents willing to part with 25%-40% of their commission. This model incorporates in itself everything real estate process shouldn’t be. Rocket Homes must be well aware of these issues but continues to operate on pay-to-play methodology in order to collect fees that needlessly make home buying and selling more expensive.