"Our Groupon deal is a natural extension of the way we work," said Yuval Degani, president and co-founder of Dream Town Realty, which has office locations in Park, West Loop, Lincoln Square and on North Sedgwick. "For anyone thinking about or currently shopping for a home, our Groupon deal is intended to put money in your pocket."
So far 173 people have purchased the offer.
Social commerce consultant Patrick Kitano, the founding principal of Domus Consulting Group, hopes "no consumer would purchase this kind of offer without due diligence." It's not like trying out a new restaurant, where if you don't like the food you don't have to go back. Buying or selling your house is a big deal, with a lot of money at stake. "Couponing real estate services will likely require ... pre-transaction interaction," he says.
Vet the Agent Anyway
A potential buyer of such a coupon should first do a little investigating. How much commission does the agent typically get? Say 6 percent, split in half with the other agent, is standard in your area. Does the broker offering the coupon have agents who often are willing to negotiate the commission down just to close the deal?
For example, when I sold my last home, the listing agent I used discounted her side of the See photos of homes for sale in your area and across the country on AOL Real Estate commission simply because I asked. The half percent drop in her commission equaled a $2,050 savings to me at closing, and I didn't have to pay $25 up front for that.
Also it would be good to know the broker's standard commission; what if 5 percent is standard for listing, but under the Groupon deal you're told it should be 6 percent? We've all seen the fine print on special offers: This coupon cannot be combined with other offers and is based on standard (i.e. premium) pricing. Again, you might get a better deal negotiating on your own than with using a coupon.
Great Deal for Brokers
It's a great agents, however, because it amounts to lead generation--the only people who will sign up will be in the market to buy or sell soon. The broker will receive more contact information from one Groupon than it would from a couple of weekends of holding open houses.
And that might be why HouseTipper thought of it first. HouseTipper is a collective buying savings operation just like Groupon, except it specializes in real estate. Every day you'll find deals, ranging from locking in a free home inspection if you sign up with a particular agent to getting discounted origination fees with a deal from a mortgage broker.
"In almost all states, brokers are permitted to rebate a portion of their commission back to their client," Walt Molony, a spokesperson for the National Association of Realtors told AOL Real Estate, so long as it is fully disclosed to both sides.
Downside to Real Estate Coupons
The only thing to watch out for, he warns, is a lender behind a short sale. "A lender in a short sale may say no to a seller receiving this money. But as long as state law permits rebates to clients and the terms are disclosed to the parties in the transaction, there is nothing inherently illegal."
For brokers looking to foray into a group coupon, whether it is with Groupon, HouseTipper, or some other company, just be aware of the state laws, New York real estate attorney Neil Garfinkel told AOL Real Estate. If a portion of the $25 is being kicked back to the real estate agent, that could be against the law in states such as New York, which has laws that prevent an agent from collecting an unearned commission.
Meaning, if you buy the Groupon but don't close a house deal before the deadline, the broker may have to give the money back, whether you close eventually or not. The $25 ultimately becomes a money-back guarantee if the broker doesn't close on your house by the expiration date. But an agent can also get around this by simply letting Groupon keep all the proceeds, or perhaps by donating its percentage of the sales to charity.
"What are [the agents] trying to accomplish?" says Garfinkel. "Is this a way for the broker to get new business? Or is it a clever way to get $25 from each person?"
Sheree R. Curry, who has owned three homes and successfully negotiated lower agent commission, is a three-time award-winning journalist who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the Wall Street Journal, TV Week, and Fortune. She's been writing for AOL Real Estate since 2009 from a Minneapolis-area rental. She seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.
These AOL Real Estate guides can help, whether you're in the market to buy, rent or sell: