What's more important to buyers and sellers? Choosing a professional with intimate knowledge of a specific location, or a proven track record and great negotiating skills?
Let’s begin with HomeLight
HomeLight was founded in 2012 by Drew Uher,e backed by one of Google’s venture capital companies, Google Ventures (GV), with Crosslink Capital and Innovation Endeavors. Their offices are located in San Francisco and Phoenix.
The HomeLight Matching Engine algorithm collects data from over 29 million transactions, including 2 million agents. Their algorithm compares the data with buyers' and sellers' criteria for what they want in a real estate agent. “Perfect” matches appear for the buyer or seller to contact.
HomeLight’s services are 100% free. Their reviews support that claim.
A buyer or seller simply answers a few easy questions. Then, HomeLight Matching Engine filters searches in five categories:
- Buying or Selling: Based upon the client’s needs, the Matching Engine filters every agent's expertise with buying or selling.
- Location: Agents located in and specializing in the target area. The algorithm compares IP addresses with geographic distance to focus on agents with experience in a city, neighborhood, and street.
- Property Type: Their algorithm analyses transactional data to focus on agents with experience in the target property type.
- Price Range: Agents' familiarity with the desired price range.
- Agent’s Personality: HomeLight matches the agent’s personality type with traits desired by the client. For example, some clients may request a tough negotiator, while others may desire an agent willing to spend lots of time helping them. Their Matching Engine uses a “Bayesian” data analysis to predict the best match.
Which Agents Qualify?
You can obtain leads with a 25 percent referral fee paid upon closing.
RealtyBizNews.com likes the site’s interface and innovative technology as a matching service.
Inman Real Estate News published several articles featuring real estate agents criticizing HomeLight.
One points out many real estate agents questioned HomeLight’s use of MLS data to overly rate agents closing high volumes of deals. They emphasize that high volume closings data shortchange most agents who may be better matches for clients.
Making it simpler to find lower-priced agents, UpNest’s website mantra states “Agents Compete, You Win." Their website also declares clients who “Compare Agents. Save Thousands."
UpNest offices are located in Burlingame, CA and Indianapolis, IN covering 22 U.S. markets.
In a nutshell, UpNest claims their clients receive multiple proposals from “Top Agents” offering lower commissions. Clients simply pick the best one after comparing costs and services. Their slogan states, “Hire the Best Agent and Never Overpay”.
UpNest analyzes thousands of agents in each location. Clients submit their preferences, and UpNest filters them to find the best agents in their area. In addition, three to five of the “best” agents submit commission quotes within 24 hours. The client then chooses the favorite agent to interview with no obligations.
Their service is completely free for home buyers and sellers. No hidden fees or costs, and no obligation to work with an agent.
Buyer’s Agent Commission Rebates: Buyers receive a rebate on the buyer’s agent commission. UpNest makes the buyer’s agent give back part of his/her commission to the buyer. The agent must choose one of three “suggested” rebate options. UpNest brags that the refund can be used to pay the down payment, buy new furniture, or anything the buyer desires.
UpNest proposals are detailed, personalized quotes for each client.
Agent proposals includes the agent’s bio, reviews, stats, etc. They also include commission rate, value added services (CMA, virtual tours, photos, etc.), and optional personalized video and/or voice greeting from the agent.
Which Agents Qualify?
UpNest proudly lists the real estate brokerages they only work with: Re/Max, Keller Williams, Berkshire Hathaway Home Services, Long & Foster Realtors®, Prudential Real Estate, and INTERO Real Estate Services.
UpNest states that their agents provide “exclusive” commission discounts to UpNest clients. The same discounts do not apply to new clients approaching their agents directly.
Buyer’s Agents: On top of the commission discounts and rebates, UpNest charges buyer's agents a referral fee upon closing. According to Inman, UpNest charges a 15 percent referral fee to buyer's agents as a “pre-rebate commission.”
Seller’s Agents: UpNest charges a 30 percent referral fee (from the gross commission before broker’s split) at the close of a sale for bringing “qualified home sellers.” While UpNest does not require seller’s agents to offer a commission discount, they point out that each agent will compete against other agents for the seller's business. This encourages discounted commissions.
In a nutshell, UpNest’s business model drives referrals to their partner agents, offering reduced commissions to compete for clients while paying a referral fee.
Inman describes UpNest as one of several new “auction-styled lead generation” sites, where agents offer discounted commissions and rebates to compete against other agents.
Don’t rely on costly online matchmaking services with reduced commissions and referral fees.
Consider a cost-effective alternative. MyBooks Marketing System for Real Estate Agents offers:
- Licensing for 16 real estate books to use as your own with your cover photo
- Training strategies for using your books to increase business
- Your own blog including over 100 pre-written posts
- Capture leads with a home value website
- Social media marketing templates
Joe Nickelson is a real estate professional dedicated to helping home buyers and sellers achieve their dreams of owning property, and helping real estate agents stop using the sometimes-vicious tactics that weigh on their consciences. He believes that the Smart Agents books will, quite literally, change people’s lives for the better. Check out his full bio here!