Compare HomeLight and Offerpad

For Sellers

Referred Agents
33%
Referral Fee
HomeLight does not provide real estate services to home sellers. Instead, this company matches consumers with various real estate agents in exchange for a 33% referral fee. HomeLight results suffer from pay-to-play bias because the network does not match consumers with agents unwilling to pay 33% of their commission to HomeLight.

For Sellers

Cash Offers
20%
Home Equity
Offerpad does not provide real estate services to home sellers. Instead, Offerpad buys homes directly, repair and resell them to other buyers or companies that rent them to tenants. Typically an offer equal to 80% of home value is expected from this type of sale after any, fees, cost of the repairs and resale markup.

For Buyers

Referred Agents
33%
Referral Fee
HomeLight does not provide real estate services to home buyers. Instead, this company matches consumers with various real estate agents in exchange for a 33% referral fee. HomeLight results suffer from pay-to-play bias because the network does not match consumers with agents unwilling to pay 33% of their commission to HomeLight.

For Buyers

Not Applicable
0
No Rates
Offerpad does not provide real estate services to home buyers. Instead, local franchisees buy homes directly, repair and resell or rent them to tenants.
Question: What is the difference between HomeLight and Offerpad?
Answer: HomeLight is a referral fee network that enables broker-to-broker collusion with use of blanket referral agreements while Offerpad is a direct home cash buyer that buys select homes off-market with cash offers and resells them at a profit to homebuyers
Compare HomeLight and Offerpad for home buying and selling. HomeOpenly is an impartial and an open resource focused on trending real estate services, portals and start-ups.

First published: 17 February 2019
Last updated: 25 April 2021

Buying and Selling with HomeLight

WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.

HomeLight is a broker-to-broker collusion scheme, where "partner agents" unlawfully agree to pay massive kickbacks to receive your information and engage in market allocation, consumer allocation, false advertising, unlawful kickbacks, wire fraud, and price-fixing practices in violation of, inter alia, 18 U.S.C. § 1346, 18 U.S.C. § 1343, 15 U.S.C. § 1, 15 U.S.C. § 45, 12 U.S.C. § 2607, 12 C.F.R. § 1024.14. As a consumer, you will always significantly overpay for Realtor commissions subject to hidden kickbacks and pay-to-play steering promoted in this scheme.

United States federal antitrust laws prohibit consumer allocation and blanket referral agreements between real estate companies.

Be smart; do not allow your information to be "sold as a lead" to a double-dealing Realtor in exchange for massive commission kickbacks paid from your future home sale, or your future home purchase.


HomeLight is a referral fee network designed to collect fees by matching consumers with local real estate agents willing to participate. HomeLight operates as a licensed real estate brokerage in California under BRE License #01900940, but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State.

When consumers submit information to HomeLight, this information is simply sold to real estate agents who are willing to pay for it with a 25% share of their commission.

HomeLight Pricing

HomeLight revenue comes from referral fees and sale of user data.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

HomeLight Editor's Review:

On paper, HomeLight seems to have a great idea – to provide its users with a list of the "most effective" real estate agents that are scrutinized across the board to systematically facilitate better offers for sellers and better terms for buyers.

HomeLight states that "our service is 100% free, with no catch. Agents don't pay us to be listed, so you get the best match." Digging deeper into Terms of Service the actual model turns out to be much less effective - HomeLight is a California licensed real estate broker that collects a 33% referral fee from all real estate agents that participate.

This fee makes it hardly a free service for anyone since referral fees are inevitably passed down to consumers.

More importantly, HomeLight applies this pay-to-play bias towards all matching results, meaning, only real estate agents that have agreed to pay a referral fee are displayed in match results for consumers.

HomeLight audits all transactions because it needs to find out how much money real estate agents receive in commissions, inevitably collecting private details of consumer's agreement for home purchase or sale.

HomeLight further claims to produce higher returns to consumers when selling, but there is absolutely no third-party evidence for this. HomeLight algorithm is self-proclaimed and is based on the data derived from MLS past transactions. There are any number of factors that affect the actual home value with no proven correlation to agent representation. In order to select a proper real estate agent, consumers need an open and a transparent information process that HomeLight is unable to provide.

HomeLight plays fees down to consumers - it states directly that the service is 100% free, but at the same time, it rigidly locks every participating real estate agent into 33% referral fee attached to the back-end of every contract. As a licensed real estate agent that doesn't perform any real estate services or takes any responsibility for the transaction, it is not entirely clear how this process works under the Business and Professions Code and RESPA.

Clearly, real estate agents only sign-up with HomeLight because the price of the referral fee can be easily incorporated into their client’s agreement with excessive commissions.

HomeLight receives the second lowest score because this service is clearly biased and it claims to provide the complete opposite of what it actually does. HomeLight has presented the following facts prior to the review getting published, but did not respond with any comments. HomeLight must be well aware of this issue but continues to operate on pay-to-play methodology in order to collect fees that needlessly make home buying and selling more expensive.

HomeLight Simple Sale™ Product

HomeLight further offers consumers a connection to local real estate developers that buy and flip homes for profit. According to the company, the majority of Simple Sale developers are only interested in purchasing off-market homes. HomeLight itself admits that 91 percent of sellers choose a real estate agent to list their home on the open market, but that does not stop it from an attempt to offer your information to developers as well.

HomeLight states it will show the seller their best iBuyer offer against an estimation for what they can sell a home in an open market with the help of an agent. The reality is HomeLight doesn’t care how your home is sold, as long as it receives a fee for directing you one way or another. It costs absolutely nothing to HomeLight to offer you a bad deal on selling your home to a real estate developer because this company is a referral fee network that is primarily interested in connecting consumers to anything that pays them a fee.

HomeLight does not state how much developers and iBuyers pay them for each successful lead, but according to third-party sources, HomeLight receives a 4% commission from the total value of your home. Remember, this fee comes from the real estate developer, so HomeLight for all practical reasons, works for that developer, not you. A developer will know that your home is off-market and it costs them absolutely nothing to give you a severely underpriced offer.

Typically, iBuyers cost consumers about 15%-20% of net equity from the home sale, when accounting for all fees and reduced cash offer against your home’s true value. Most developers will not take anything less of a 30% margin below market. The reason is developers experience high risks and double transaction costs when making an offer on your home, and HomeLight’s 4% commission on the sale is a very real closing fee to account for. The bank, on the other hand, does not care how you sell your home or for how much. Your mortgage company receives the same amount from the sale of your home, so these all excessive costs work directly against your net equity as a seller. If you are seriously considering Simple Sale offer made to you using HomeLight, the best way to approach it is with your own real estate agent who does not pay any referral fees to HomeLight.

Of course, matching you with a competitive agent to list your home on the open market is something HomeLight is not built for. Remember, HomeLight is a broker that is interested in receiving a referral fee for any match. If HomeLight does not receive payment of some sort from a broker, you will never see them on their platform. When you use a broker sent to you by HomeLight, you are paying for two brokers.

Consumer Steering

Some consumers who receive a recommendation for the three local HomeLight partner agents will often proclaim that the process of selecting a Realtor is very simple and that they have experienced excellent results.

The question stands, why doesn’t the editor’s review for HomeLight extend a similar recommendation? The difference is that the editor’s review focuses directly on the quality of HomeLight brokerage as an information channel, while most consumers tend to combine HomeLight brokerage with an experience provided by HomeLight partner brokers into a single experience. From an editor’s perspective, these are not the same.

The way consumers find a real estate professional must be unbiased and free from pay-to-play incentives in order to be considered as a quality channel.

HomeLight brokerage offers an excellent channel that proactively steers consumers toward a highly selected pool of partner brokers who have a blanket referral agreement with them, in an exchange for a significant share of their commission.

This is a very different experience than having to genuinely rate local agents and offer an unbiased recommendation. HomeLight has a direct financial incentive to steer consumers toward brokers who charge higher commissions.

Moreover, HomeLight brokerage operates by excluding itself from the competition with partner agents. In the United States, it is unlawful for real estate professionals to allocate consumers or organize into broker referral networks by means of blanket referral agreements.

HomeLight is a brokerage and it must compete with other brokers, instead, the company organizes brokers into a network in order to receive a cut of their commission. Real estate professionals working with HomeLight no longer compete for consumers, but rather compete for HomeLight to steer their business.

HomeLight consistently applies a logical fallacy called “Appeal to Authority” where it states that their partner agents are the best simply because the company has done some sort of “black box” research without actionable reasoning to support the claim. HomeLight algorithm is biased by default, simply because it will only match consumers with partner agents, and not all local agents.

HomeLight cannot actually rate all local agents and publically disclose this data, simply because agents who are rated badly will argue that the system of rating is flawed – not all transactions are recorded in the MLS, it is impossible to truly determine the quality of agents based on data provided in the MLS, some agents will underprice homes to sell them quicker, etc. Consumers are legally allowed to rate their experience with services in the United States. Unbiased channels such as Yelp! freely offer unbiased medium with good information where brokers cannot buy their recommendations with referral fees, or offer consumers gift cards to write reviews.

HomeLight only offers three best choices, simply because these agents will not argue with that determination, in fact, they are willing to provide a kickback of their commission for the privilege.

All of these reasons combined are why the editor’s review rating is so much different from positive consumer reviews. The editor’s rating focuses on the fairness of the process, rather than the individual outcome. In order to promote fair practices in the industry, we place a very different value on pay-to-play steering vs. unbiased match results.

Is HomeLight Free?

HomeLight often proclaims that its “service is 100% free.” We find this statement to be false. HomeLight is not free, in fact, this “paper” brokerage adds unnecessary referral fees into transactions that make it more expensive to buy or sell any home.

Eventually, HomeLight is a brokerage and their fees are paid by consumers with higher commissions. HomeLight further claims that “agents don't pay us to be listed, so you get the best match.” This is a use of a “Modal Logical Fallacy” because it specifically concludes that because something is true, it is necessarily true, and there is no other situation that would cause the statement to be false. Simply because agents don’t pay HomeLight to be listed, doesn’t mean that agents don’t pay HomeLight at all. In fact, HomeLight actively steers consumers toward agents who pay them, just after the transaction.

As of 2019, HomeLight claims to have made a successful match for about 390,000 people with agents. The median home price of a home in the United States is about $230,000. Multiplying the two figures yields about $100 Billion in home sales. Assuming a 5-6% commission, this yields about $5 to $6 Billion in real estate commission business generated nationwide. In the recent Crunchbase article HomeLight claims to have “driven well over $17 billion of real estate business nationwide,” which indicates that HomeLight works with homes above the median price. Simply stated, HomeLight has collected a “standard” 25% (presently, 33%) referral fee on commissions valued anywhere from $5 to $17 Billion since its inception in 2012.

This yields a mind-blowing estimate set at $1.25 to $4.25 Billion in commission kickbacks paid to HomeLight from participating brokers across the United States. Almost all of it is profit since HomeLight doesn’t perform any services typically offered by real estate brokers.

HomeLight advertises a 100% free service, yet it subjects consumers to Billions in added fees in one of the most important transactions of their lives.

Update: on November 4, 2021, HomeLight has originated a request to the editor asking for this review to be removed.

The following is a pdf link to the notice originated by HomeLight, dated November 4, 2021.

The following is a pdf link to the reply written by the editor of this review, dated November 9, 2021.

Content of the Editor's Review published herein is presently challanged via legal action filed by HomeLight, Inc. brokerage in U.S. District Court California Northern District. HomeOpenly has, in turn, countersued HomeLight, Inc. brokerage. The following is select/most relevant public court docket information that describes the general nature and premise of the on-going dispute. To view complete public case information, you may visit the official docket information portal for the Northern District of California

Case: Homelight, Inc. v. Shkipin et al
Civil Case No.: 3:22-cv-03119-TLT
Date Filed: May 27, 2022
Trial Date: April 1, 2024
Jury Demand: Both
Nature of Suit: 840 Trademark; 410 Antitrust
Jurisdiction: Federal Question
Cause: 15:1114 Trademark Infri mngement; 15:1125 Trademark Infringement (Lanham Act); 15:1 Antitrust Litigation; 15:2 Antitrust Litigation.

05/27/2022 Docket No. 1 COMPLAINT for Trademark Infringement (15 U.S.C. § 1114) and Lanham Act Section 43(A) False Advertising (15 U.S.C. §1125 (A)) against Dmitry Shkipin, et al. Filed by Homelight, Inc.

06/18/2022 Docket No. 15 First MOTION to Dismiss COMPLAINT filed by Dmitry Shkipin.

06/18/2022 Docket No. 16 ANSWER to Complaint with Demand for Jury Trial by Dmitry Shkipin.

06/18/2022 Docket No. 17 COUNTERCLAIM FOR RESTRAINT OF TRADE (15 U.S.C. § 1); ATTEMPTED MONOPOLIZATION (15 U.S.C. § 2); MISLEADING TRADEMARK USE (15 U.S.C. § 1125); AND UNFAIR PRACTICES (CA BUS. & PROF. CODE § 172000) against Homelight, Inc. Filed by Dmitry Shkipin.

06/22/2022 Docket No. 18 First MOTION to Dismiss A SINGLE PARTY UNDER FEDERAL RULES OF CIVIL PROCEDURE RULE 21 filed by Dmitry Shkipin.

07/05/2022 Docket No. 20 OPPOSITION/RESPONSE (re 15 First MOTION to Dismiss COMPLAINT ) (Homelight, Inc.s Opposition to Defendant Shkipins First Motion to Dismiss Complaint) filed by Homelight, Inc.

07/05/2022 Docket No. 21 OPPOSITION/RESPONSE (re 18 First MOTION to Dismiss A SINGLE PARTY UNDER FEDERAL RULES OF CIVIL PROCEDURE RULE 21 ) Homelight, Inc.s Opposition to Defendant Shkipins First Motion to Dismiss a Single Party filed by Homelight, Inc.

07/07/2022 Docket No. 23 REPLY (re 15 First MOTION to Dismiss COMPLAINT ) DEFENDANTS REPLY TO PLAINTIFFS RESPONSE IN OPPOSITION filed by Dmitry Shkipin.

07/07/2022 Docket No. 24 REPLY (re 18 First MOTION to Dismiss A SINGLE PARTY UNDER FEDERAL RULES OF CIVIL PROCEDURE RULE 21 ) DEFENDANTS REPLY TO PLAINTIFFS RESPONSE IN OPPOSITION filed by Dmitry Shkipin.

08/01/2022 Docket No. 28 MOTION to Dismiss Counterclaims filed by Homelight, Inc.

08/05/2022 Docket No. 30 OPPOSITION/RESPONSE (re 28 MOTION to Dismiss Counterclaims ) CROSS-CLAIMANT SHKIPINS OPPOSITION TO CROSS-CLAIM DEFENDANT HOMELIGHTS MOTION TO DISMISS CROSS-COMPLAINT filed by Dmitry Shkipin.

08/24/2022 Docket No. 34 REPLY (re 28 MOTION to Dismiss Counterclaims ) [Plaintiff Homelight, Inc.'s Reply in Support of its Motion to Dismiss Counterclaims] filed by Homelight, Inc.

10/27/2022 Docket No. 47 First MOTION for Preliminary Injunction filed by Dmitry Shkipin.

10/28/2022 Docket No. 48 ORDER DENYING MOTIONS TO DISMISS by Judge Trina L. Thompson denying 15 Motion to Dismiss; denying 18 Motion to Dismiss.

10/28/2022 Docket No. 50 Second MOTION to Dismiss COMPLAINT filed by Dmitry Shkipin.

11/10/2022 Docket No. 54 INITIAL CASE MANAGEMENT STATEMENT AND [PROPOSED] ORDER filed by Dmitry Shkipin.

11/16/2022 Docket No. 56 CASE MANAGEMENT STATEMENT (Homelight, Inc.'s Updated Initial Case Management Statement and [Proposed] Order) filed by Homelight, Inc.

01/02/2023 Docket No. 63 MOTION to Expedite MOTION TO WAIVE MOTION HEARING AND SUBMIT ON PAPERS HOMELIGHT, INC.S MOTION TO DISMISS COUNTERCLAIMS filed by Dmitry Shkipin.

01/17/2023 Docket No. 64 OPPOSITION/RESPONSE (re 63 MOTION to Expedite MOTION TO WAIVE MOTION HEARING AND SUBMIT ON PAPERS HOMELIGHT, INC.S MOTION TO DISMISS COUNTERCLAIMS ) Cross-Motion to Vacate Pending Briefing Deadlines to Accommodate Settlement Conference Delays filed by Homelight, Inc.

02/17/2023 Docket No. 70 STATUS REPORT HOMEOPENLYS ADR STATUS REPORT FOR FEB. 17, 2023 by Dmitry Shkipin.

04/20/2023 Docket No. 81 STATUS REPORT HOMEOPENLYS ADR STATUS REPORT FOR APR. 17, 2023 by Dmitry Shkipin.

05/16/2023 Docket No. 93 OPPOSITION/RESPONSE (re [50] Second MOTION to Dismiss COMPLAINT ) filed by Homelight, Inc.

05/16/2023 Docket No. 94 OPPOSITION/RESPONSE (re [47] First MOTION for Preliminary Injunction ) (Homelight, Inc.'s Opposition to Defendant Shkipin's Motion for a Preliminary Injunction) filed by Homelight, Inc.

05/17/2023 Docket No. 95 REPLY (re [47] First MOTION for Preliminary Injunction ) HOMEOPENLY'S REPLY TO HOMELIGHT, INC.S OPPOSITION TO MOTION FOR A PRELIMINARY INJUNCTION filed by Dmitry Shkipin.

05/17/2023 Docket No. 96 REPLY (re [50] Second MOTION to Dismiss COMPLAINT ) HOMEOPENLY'S REPLY TO HOMELIGHT, INC.S OPPOSITION TO SECOND MOTION TO DISMISS COMPLAINT filed by Dmitry Shkipin.

09/27/23 Docket No. 123 ORDER DISMISSING COUNTERCLAIMS WITH LEAVE TO AMEND Re: Dkt. Nos. 17, 28 by United States District Judge P. CASEY PITTS

10/18/23 Docket No. 123 FIRST AMENDED COUNTER-COMPLAINT FOR RESTRAINT OF TRADE (15 U.S.C. § 1); ATTEMPTED MONOPOLIZATION (15 U.S.C. § 2); FALSE ADVERTISING (15 U.S.C. § 1125); UNLAWFUL, UNFAIR, AND FRAUDULENT PRACTICES (CA BUS. & PROF. CODE § 17200) filed by Dmitry Shkipin

Where does HomeLight operate?

HomeLight currently operates in select areas across United States.

Buying and Selling with Offerpad

Offerpad is a direct home buyer that makes cash offers to sellers as it considers the condition of a home, improvements, home's upgrades, and required repairs.

In determining the offer, Offerpad discounts the offer amount from the estimated retail value after it’s fully renovated.

Offerpad Pricing

Offerpad makes money with fees and a difference between buying and selling each home. Offerpad claims service fees vary between 6% to 10%, plus an additional 1% to 3% of the purchase price in closing costs.

Sellers can also expect to receive an offer that has a built-in margin of 5% to 10% between the market price today and what Offerpad plans to flip the home in the open market.

In summation of all these fees, an offer equal to 80% of home value is reasonably expected from this type of sale after fees and cost of the repairs and resale.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Offerpad Editor's Review:

Offerpad will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After it buys the home, it renovates and resells it for a profit to another buyer or another company that rents it out to qualified tenants. With low offer price, comes a convenience of an all-cash closing when selling a home. Offerpad typically provides a conditional offer within 24 hours.

Offerpad will perform a free, on-site inspection of your home within 15 days of the signed conditional agreement. If Offerpad finds something it doesn't like and the sellers decline to make any requested repairs or issue a Offerpad credit it demands, Offerpad can then choose to cancel the contract or may determine that it still wants to move forward with the purchase of the home. If Offerpad elects to cancel the contract, there is no penalty to either party.

Offerpad does not make offers for most homes, it will only make offers for single-family residential homes in areas where it operates, including condos and townhomes, built after 1960, with a value of no more than $500,000-$600,000 as well as fair conditions without any major repairs required. Offerpad will not consider homes with significant foundation, structural or other condition issues.

Typically, Offerpad uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.

The main disadvantage of using Offerpad is high loss in homeowners' equity. Offerpad is a "heavy" model, ready to buy homes in all-cash transactions. As any real estate investor, Offerpad is susceptible to losing money in any given transaction. Offerpad model further suffers from a "double expense" such as paying all the normal transaction costs that come with selling a home—including a commission to a buyer's agent (3%), concessions to buyer, holding costs, maintenance fees, taxes and other costs to list and market the home.

This model is prone to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip.

Offerpad is not legally bound to represent consumers, its main legal obligation is to its stakeholders. Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home.

Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, or how much of homeowners' net equity is lost in the transaction with Offerpad.

Today, there are a number of highly qualified real estate agents who offer competitive listing rates and flat fee listings across the United States. Unless a situation absolutely requires a quick sale, HomeOpenly recommends that consumers first consider using a licensed real estate agent working on competitive terms to properly list their homes on the open market before turning to Offerpad option.

Where does Offerpad operate?

Offerpad currently operates in select areas across Atlanta, Charlotte, Las Vegas, Los Angeles, Orlando, Phoenix, Tucson, Tampa, Salt Lake City, and Dallas-Fort Worth..