Compare Opendoor Brokerage and Clever Real Estate
For Sellers
For Sellers
For Buyers
For Buyers
Answer: Both Opendoor Brokerage and Clever Real Estate function as a referral fee network that enables broker-to-broker collusion with use of blanket referral agreements.
Buying and Selling with Opendoor Brokerage
WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.
Opendoor Brokerage) 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.
Opendoor is a multi-state VC-backed real estate investor that operates across highly specific locations. Where available, Opendoor offers cash to sellers for homogeneous homes built after 1960 with a value between $125,000 and $500,000. Opendoor is the parent company of several real estate brokerages, including Opendoor Brokerage Inc., Opendoor Brokerage LLC, and Opendoor Texas Brokerage LLC (the “Opendoor Brokerages”).
Opendoor Brokerage is a referral fee network designed to collect fees by matching consumers with local real estate agents willing to pay it. Opendoor Brokerage operates as a licensed real estate brokerage in California under BRE License 02061130, and Texas under TREC License 9008105, but neither broker 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 Opendoor Brokerage, this information is simply sold in exchange for an undisclosed fee with real estate agents in a process known as a “blind match.”
Opendoor Brokerage Pricing
Opendoor Brokerage revenue comes from undisclosed referral fees. Referral fees set by such networks range anywhere between 30%-40% of the entire agent’s commission. According to the company, "Opendoor Agent Partners only pay a referral fee to our brokerage if they close on a transaction with a referred seller or buyer. The fee is a percentage of the agent's commission, and averages 1% of property sale price unless otherwise noted in agent partner agreement."
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
Opendoor Brokerage Editor's Review:
Using its website, Opendoor Brokerage engages in a process known as price fixing because it sets rebates for independent real estate professionals using the network.
Opendoor Brokerage refers consumers to third-party agents that can represent them in home purchase or sale (“Opendoor Partner Agent”) and requires buyer’s agents to offer certain discounts or promotions contingent upon working with the referred consumers.
Opendoor Brokerage receives a referral fee, around 1% of the home price, likely 30%-40% of Partner Agent's entire commission when referring consumers to list or buy a home with an Opendoor Partner Agent. Opendoor Brokerage requires Opendoor Partner Agents to offer 1% of the purchase price to buyers at closing in the form of a commission rebate. The amount is subject to a minimum buyer’s agent commission to Opendoor Partner Agents of $3,000, which means it is calculated as the lesser of either 1% of the price of the property consumer buys, or Opendoor Partner Agent’s commission minus $3,000. According to Opendoor Brokerage, this amount may be prohibited or reduced on the basis of the purchase type (e.g., short sale), lender requirements, loan type (e.g. FHA, VA), or the law.
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.
"Agent Partners only pay a referral fee to our brokerage if they close on a transaction with a referred seller or buyer. The fee is a percentage of the agent’s commission, and averages 1% of property sale price unless otherwise noted in agent partner agreement. Opendoor Agent Partners are eligible to receive both buyer and seller referrals. Actual volume by referral type may vary over time. The Opendoor Agent Partner program is a broker-to-broker client referral partnership and is supplemental to your existing brokerage affiliation." Source: Opendoor Brokerage website.
By setting buyer's rebates for other brokers across many regions in the United States, Opendoor Brokerage 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.
With Opendoor Brokerage consumers have zero control over what agents the company shares their information with. Opendoor Brokerage simply subjects a real estate transaction with an additional referral fee that is equal to 1% of the home price. This fee is paid directly by the Opendoor Agent Partner to Opendoor Brokerage for failing to deliver a seamless consumer selling experience. Remember, Opendoor claims to offer consumers to buy homes directly as a revolutionary approach to home selling, instead, it systematically sells inquiries that it is unable to meet to random Opendoor Agent Partners for a fee.
Consumers can expect to significantly overpay for the transaction in the form of a higher commission with Opendoor Agent Partners. Even after consumers take into account a price-fixed amount in commission rebate, Opendoor Agent Partner is still required to pay a sizable referral fee, which means that same agent is able to offer a much better rate when approached directly.
For sellers, Opendoor Brokerage does not currently price fix listing rates, so consumers are likely to be referred to an agent who charges the highest commission possible - a "standard" 6% listing rate. There is little incentive for Opendoor Brokerage to connect consumers with the best and most competitive listing agents. Instead, Opendoor Brokerage aims to receive the highest referral fee possible by steering consumers toward a very limited set of agents who have a signed Referral Fee Agreement with Opendoor Brokerage.
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.
Where does Opendoor Brokerage operate?
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.