The "contact" button is one of the easiest money makers for the real estate industry. The contact button may say different things (ie. contact agent, schedule a tour, email agent, etc.) but they all aim to do the same thing: collect your information and profit from it. You should know that submitting your information in this manor could hurt your chances to negotiate listing commission savings or a buyer's rebate.
So what happens when you hit the contact button?
Examples: Zillow, Trulia, Realtor.com
This button will typically appear at the top of the page when viewing a specific home. It may give you the impression that selecting this button will connect you with the listing agent, but it typically does not. Some sites will send you directly to an unrelated agent and others will send to a third party that will take your information to see if you are a legitimate buyer or seller. If they believe you are a serious seller or buyer, they can sell your information for more money.
Companies that sell your information this way typically charge a high monthly fee or have the agent agree to giving them +30% of the commission they earn from you.
A “paper brokerage” is a website that carries a brokerage license, but does not sell or buy homes. Having a license allows them to collect referral fees from agents, which can cost your referred agent up to 40% of their earned commission. Paper brokerages are most commonly seen within the platforms that claim to find you the “right agent..” or the “best agent for free!”
According to an analyst that spent years working with these sites, newer agents spend the most on advertising and referral platforms. The amount of ad spend declines drastically for agents after three years. This is because most agents develop their word of mouth referrals after three years and no longer need to pay as much for leads. While they may still pay for some advertising, most do not participate in commission share platforms.
Are you on a brokerage specific website that shows you their agents?
While these sites will connect you to the agent you want to contact (when on the agent's specific page), there is a chance that the main brokerage might also have access to your information. If a company has multiple brands under their umbrella, you need to look at their terms to see who exactly will have access to your information. As an example, real estate company A has a brokerage license for agents, but also offers home loans and insurance. You are now a lead for not only their agent but also for their loan and insurance services.
Tip: this is why you will often not see the agent’s email address directly on the companies website and instead will have to fill out a “contact us” section. Using the “contact us” section helps to quickly enter you into the database.
You lose the power to negotiate savings
Most of the websites that don't connect you directly or offer to find you the "best agent for free" likely take 25% to 30% of your agents commission after you close. This means your agent
If you unknowingly use a site that connects you to an agent, and that agent has to give away 30% of what they will earn when you buy or sell, what is left for you to negotiate in regards to listing commissions or buyers rebates?
The big question to ask yourself, is if an agent is willing to give up 30% of what they earn just to gain business, wouldn’t that 30% be better off given back to consumers instead?
You are only being referred to those that pay.
For most of these websites, agents that you are connected with will only be the ones that agree to pay for your information. If most good agents decrease their advertising and referral spend after year three, then are you really being referred to the “best” agent or just the one that pays to the best?
3. You become a lead for other companies
Some companies have agreements with other companies as referral services. If one company has your information, they can promote a referral company to you. If you buy the referred product, then the company will get a kickback. While not every company does this, you will see it sometimes with different real estate services, like home warranties.
As a consumer, you have the right to ask if your agent or company is getting a kickback for referring them.
1. Contact agents directly
Either call the agent on the phone (using their direct line) or utilize social media and contact the agent via direct messaging.
2. Don’t be afraid to speak up and ask questions
As a consumer, you have the right to ensure you information is not sold or passed along. You also have a right to ask if your agent or a referring company is benefitting from what is referred to you.
3. Pay attention to where and what you are searching on
If the site has a brokerage license, but doesn’t sell or buy homes, then they most likely participate in some sort of referral exchange.
4. Scroll through the whole listing
If you are seeking to contact the listing agent of a home for sale, try to scroll the whole way down the listing page as most websites wil put the info at the very bottom. If you are a buyer, be careful of contacting a listing agent directly. Having an agent represent you, who is already in a contract with a seller, will mean you are not working with someone that has your best interests in mind. That would be like going to court and asking the prosecutor to also represent you as their defense lawyer.
At Selling Later, we believe in giving time and control back to consumers. This is why we do not sell or share your information with third parties and why every inquiry you make goes directly to the person that posted the home. Learn more about us here.