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.
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 25% 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 25% 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.
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