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Rebate-driven firm coming to Palm Beach County
ZipRealty, the California-based firm best known for giving commission rebates to buyers, plans to open its first Palm Beach County office this summer.
ZipRealty, which mostly represents buyers rather than sellers, offers a simple sales pitch: Use one of its agents and the company will give you 20 percent of its commission.
The numbers break down like this: Buy a $400,000 house with a 5 percent commission. Say the seller’s agent and buyer’s agent split the $20,000 fee equally, and you’d get 20 percent of ZipRealty’s $10,000, or $2,000.
ZipRealty of Emeryville, Calif., already has offices in Orlando, Tampa and Miami. ZipRealty’s consumer-friendly model has hit a few bumps. The company is growing fast, and federal regulators have been pushing the states that forbid real estate rebates to change their minds. Still, ZipRealty’s shares have plunged since its 2004 initial public offering, and traditional brokers haven’t exactly embraced the model.
In a meeting with Wall Street analysts last week, Richard Smith, head of Cendant Real Estate Services, the nation’s largest real estate brokerage, pooh-poohed discounters and their practice of paying agents commissions rather than salaries.
“These deep discounters are going to have a tough time surviving the change in the marketplace,” Smith said.
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By JOHN
June 28, 2006 02:38 PM | Link to this
One of Cendant’s largest clients USAA jointly pioneered this concept with Cendan’t help. Strange how it’s now a foreign concept