Ask any real estate broker what the buzzword in the industry is right now and they'll say "VOW." No, not pledges to honesty and better business practices, we're talking about "virtual office websites," basically the ability to browse every available listing on the market without having to leave one page (search engines like StreetEasy, Natefind, Trulia, etc. do a pretty good job, but are not 100% comprehensive). The inability to see what brokers see has been a complaint of NYC home hunters for roughly 500 years, but the Real Estate Board of New York has done its members proud by fighting against complete market transparency. However! A lengthy court battle and legal settlement forced REBNY to funnel listings directly to VOWs that meet certain guidelines and pay fees.
So far the impact for consumers has been minimal (VOWs aren't as data rich as brokers' MLS systems, and they're a bit annoying with all the registering and logging in), but the big brokerages are scrambling to VOW up their websites?that's right, Elliman displaying Corcoran listings!?and then things should get fun. For now it's mostly still a little guys' game, and with that, here comes CondoDomain, with some tricks up its sleeve!
Launched today in New York City (check it out), the Boston-based online brokerage would not be here without the VOW agreement. It's intent is to work with buyers only, and the VOW system allows it to display oodles of listings on its site to attract clients. (The CEO told The Real Deal he moved to New York the weekend after the VOW settlement was confirmed.) CondoDomain's juicy gimmick: They give part of their commission back to the buyer. This works in two ways:
1) Full Service: The traditional buyer-broker relationship, with a CondoDomain agent guiding the client through the whole process. But after the deal closes, CondoDomain gives 20% of its 3% commission back to the buyer. On a $1 million apartment, that's a $6,000 refund.
2) Flat Fee Service: The buyer does all the hunting on his own and then pays a $10,000 fee for a CondoDomain broker to submit/negotiate the offer and close the deal. The entire 3% commission, minus the $10,000 fee, is refunded to the buyer.
Is this legal? Yes, according to CEO Tony Longo, who dropped by Curbed HQ to pitch his dream and express his fear that giving back money will cause the big brokerages to call on their secret ninja army to take him out. That remains to be seen (Tony? Still there?), but this is an interesting strategy, no? And maybe just a wee bit wacky? There's also a blog we'll be keeping an eye on, which hopefully won't also be refunding readers. We'd be ruined!
· CondoDomain [ny.condodomain.com]