ZipRealty Pays Buyers 20% Commission
ZipRealty, on its homepage, offers to give 20% of the commission to the buyer if you select them as your buyer’s agent. Wow, that’s one hell of a kickback and something I’ve never seen before. Usually you see agents, in this competitive market, offer deals to the seller but now they’re offering them to the buyer as well. If I was still buying a house, I’d use ZipRealty as my buyer’s agent in a heartbeat. On my house ($295k), the commission was 2.5% and so that meant I would’ve gotten over $1,600 back - which would’ve been real nice.
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I tried to use ZipRealty when I purchased my home almost 2 years ago. the agent showed me two homes and then never returned my calls again. I ended up purchasing my current home 30 days later. So my impression was this only works if you do all the leg-work and have the home picked out you want to buy already. Then contact the ZipRealty agent and have them write-up the offer. Otherwise just do what I did which was put in an offer on the home with the sellers agent. When negotiating use the fact that you are not splitting the commission with another agent (buyer’s agent) and discount the price by that much when you make your fair offer.
I had two friends who tried ZipRealty, and they both had experiences similar to Jane’s. My friends pretty much had to do all the leg work themselves. And half the time, the agent showed up late or missed the scheduled appointments entirely. Also, they didn’t seem to know the area/neighborhoods very well.
I have met with two different Zip Realty Agents to look at homes that interested me. Both of my experiences were posititve in that the agents were friendly and helpful. However, they were clearly rookies. I say use them as a starting point, but don’t look for any particular insight or experience to help you in this process.
Sounds like a great plan now that we’re in the internet age. Go find your house on the web, drive by to see it in person, then if you’re really interested have zip let you inside to check it out.
Not likely what you want to use if you aren’t familiar with the area.
The whole realtor compensation structure is a joke. I love commision based compensation because of its ability to motivate but rigid percentages are crazy for housing. I think a sliding scale would be preffered. Say 3% for the first 100K, 2% for the second 100K, and 1% of each additional. Just some numbers for example.
CK - The downside of that sort of sliding scale is something mentioned in Freakonomics. RE Agents have their best interests in mind and so they’ll be looking to make the quick sale instead of maximizing the final sale price. A sliding scale would minimize incentive even more. Flipping the scale over might be a start to something interesting…
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Jim- You’re right. I can’t think straight when thinking of their insane commisions.
Most agents in my local market will be happy to give out 20% commission as a kickback if one asks.
Zip Realty is a nightmare. The 20% is not taking off the top of the 2.5% . It is after all the deductions and turns out to be very little and Zip is not going to tell you that. If you think you are going to get anywhere near $2000 out of $10,000 commission back, you don’t know Zip Realty. I guess they count on our stupidity and our poor math skills. The place is a scam. My real estate agent from Zip got close to nothing from my home which sold for over $600,000 and then quit. That is why there are such flakes at Zip and there is no broker behind the company. So the one that makes all the money is Zip Realty. Just one word of warning. Zip has one of the most sophisticated spy ware and you are constantly being monitored by Zip. And that is scary in itself in a real estate transaction.
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