Realogy kickbacks

I am one of those NYC rebate brokers who gives back up to 67% of my commission. We published an article about this yesterday here: https://digsrealtynyc.com/amazon-and-realogy-real-estate-partnership/. It's pretty clear to me that cash is far more valuable than a credit to use on select items/services at Amazon. Plus, our rebates typically far exceed $5,000. And, most importantly, we pride ourselves on our client service, responsiveness, market knowledge and integrity. Those attributes are priceless when having a partner along the way with the potentially biggest purchase of your life.

Dan Gotlieb
Digs Realty Group
www.digsrealtynyc.com

First, rebates are different than kickbacks. Kickbacks to third parties in real estate are not legal and a broker can lose their license for kicking back money to a super, DM or managing agent. Rebates on the other hand are championed by the DOJ, https://www.justice.gov/atr/rebates-make-buying-home-less-expensive.

That said I'd be happy to use a broker that gave me 5K towards an Amazon purchase. Commercial real estate brokers have been giving rebates for many many years, it's just not talked about much. I believe I was the first one in NYC to offer commission rebates as part of our extremely effective business model. No complaints so far:)

It's why I use my AmEx card and Chase ink. Yeah I'm spending money, but love getting my points. As I always say we're not the only way, but it's certainly good to have options.

Keith Burkhardt
The Burkhardt Group

It's certainly not clear that anybody doing an Amazon/Realogy deal is getting cold hard cash at closing. Looks mostly like a credit toward "amazon home services", and a bunch of specified products, which you may or may not want.

The Verge (Australia) had an article on this the other day, in which they said:

Depending on how much they cough up, buyers can cash in-on between $US1000 to $US5000 in services and products. Here’s how this breaks down by spend:

$US150,000 -$US399,000 : A $US450 credit toward Amazon Home services like unpacking, cleaning, and furniture assembly, plus: an Echo Dot, an Echo Show and a Ring Doorbell

$US400,000 -$US699,000 : A $US1000 credit toward Amazon Home services, plus: aforementioned products as well as a Sonos Beam and an eero Wi-Fi

$US700,000 and up: A $US1500 credit toward Amazon Home services plus: 14 Amazon products and 12 Kasa Lightbulbs.

And the URL pretty much gives you their view on the deal:
https://www.gizmodo.com.au/2019/07/give-up-your-privacy-for-5000-worth-of-amazon-crap/

Makes it a bit less attractive. I thought it was a straight credit you could use towards almost any Amazon purchase.

Off topic, but I have a point here at the end.. I was at ups store the other day and they had tons, and I mean tons, of Amazon returns waiting to get picked up. He said it is insane how much goes back to them. Recently, I ordered a $12 product I needed for a project, got wrong size, tried to return and was prepared to return to Amazon, instead they said keep it. Made me start to think. Back to ups guy, he said he is hearing from people he knows that work at Amazon that they just get bulk loads of returns that just got stocked never to sell again. Tons of stuff, that may or may not become garbage. Back to the point.. Amazon exec says, what do we do with all this stuff? Another exec says, hmm, maybe we create a store with this stuff and offer all these things as incentive to sell a different service, like real estate. Didn't Jeff say he always wanted in on real estate?

Too nutty of an idea?

Apparently there are also tons of people who get stuff from Amazon to use once and return (especially vloggers, instagrammers, etc)

This seems to be the case with many people who have online sales based businesses. We recently purchased an avocado mattress, wife doesn't like it so we are returning it within the hundred day trial period. The process is it gets donated to an assigned charity, once it's picked up they refund your money.

With Wayfair we had a similar experience as Noah. We purchased 6 bar height chairs, didn't like them. We had taken one out of the box and assembled it, we told this to the customer service rep and they said just send back the others and keep that one!?

I see purple bricks has packed up and gone back over the pond. ZipRealty also didn't make it instead sold their technology to realogy. Redfin is hanging in there, however modified there discounting model.

We currently do between 50 and 60 transactions a year, $80-$100m. I've been approached by a handful of people that want to scale the business. One recently noted that my costs are 1% of income, and that is the key to our success and very healthy margins. I think you'll continue to see disruption in the real estate model, just like E-Trade, Expedia etc eventually took root. The traditional model won't go away, but consolidation will continue has new players figure things out and enter the field. What we did was focus on adding value to the consumer, not just the agent. We are essentially a full service brokerage, we just don't have a corporate broker that sucks up a big percentage of our commission. We share that with the client.

Keith Burkhardt
The Burkhardt Group