I read this morning on Inman news that ZipRealty is Eliminating Buyer Rebates. And for those that do not have a premium membership this article has a lot of information - ZipRealty Eliminating Buyer Rebates.
So the question now is are there any other discount realty services that are offering buyer agent rebates? One of the problems with the ZipRealty model is that in some markets, buyer agent rebates are simply not allowed. And in others, the consumers catch on that the quality of the agent just is not there. Consumers are more interested in getting quality service and representation than a buyer rebate at the end of the deal. Especially since they do not have to pay for any of the real estate commission in the first place.
In Philadelphia, I only had a couple of deals accepted with Zip Realty agents, all where it was obvious that the agents had no clue what they were doing. None of those deals made it to settlement. Maybe those were isolated incidents. But I can see that they were not closing that many deals at all. So obviously ZipRealty, as mentioned in the article, had to make a business decision to eliminate these rebates to try to stay in business. Their website did attract a lot of traffic in the past but now that the rebate gig is over, will the website still place as high? And will they be able to convert that traffic to clients?
The same goes with listings. Most sellers realize that in this market that they need a professional to properly advertise and market their property. And one that has the experience to negotiate a deal and get it to settlement once it is accepted. There is much more risk with a discount broker. Is it worth it by saving 1 percent or whatever the discount might be? Maybe for some, in a sellers market. But for most, probably not. At least not in this market.
What are your thoughts on this subject - buyer rebates?
With ZipRealty ending them, are rebates essentially dead now too?
What are your thoughts about the discount model in general in this market?