OJO Labs is a referral fee network designed to collect referral fees by matching consumers with local real estate agents willing to pay it. OJO Labs operates under a variety of broker licenses, mainly two issued by the Texas Real Estate Commission as OJO Labs Inc. 9007689 and OJO Home LLC 9008342, 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. In exchange for matching consumers with an OJO Labs Partner Agent, OJO Labs is compensated by the Partner Agent with an undisclosed percentage of their commission. As of June 2020, OJO Labs further operates a real estate online brokerage Movoto. When users are ready to talk to an in-person agent, OJO refers clients to a Movoto agent, or Partner brokerage.
OJO Labs revenue comes from undisclosed referral fees. Referral fees set by such networks range anywhere between 25%-40% of the entire agent’s commission.
For consumers, OJO Labs promises real estate assistance as a lead nurturing platform and a transaction manager. The platform is supposedly able to learn a buyer's preferences via machine learning and match them with homes that fit their needs. By gathering consumers' home preferences and budgets, OJO communicates conversationally through mobile text as a personal advisor throughout the home-buying process.
For real estate professionals, OJO Labs promises a scalable, high-touch experience that reflects well on a brokerage and helps increase closings by scrubbing leads as they come in and nurturing buyers with unique insights powered by machine learning. Once a homebuyer is prepared, a home concierge initiates a live transfer to the Partner Agent. OJO representatives give Partner Agents all the background information on the homebuyer to make the transition as warm as possible. This handoff helps ensure both consumers and agents alike receive the most seamless, hassle-free experience. OJO claims to help real estate professionals to create stronger, better-informed connections with buyers and sellers and keeps them engaged until they're ready to get down to business.
For Partner Agents, there is no upfront cost to join OJO to receive leads and referrals. The referral fee is paid on each lead that results in a close.
In other words, OJO Labs is a middle-man that scrubs consumer's information and passes it along to a broker who is willing to pay for it with a cut of their commission. All options offered to consumers by OJO Labs suffer from pay-to-play bias. If a broker is unwilling to give a portion of their commission to OJO Labs, the company has no interest in recommending them. The following is a set of statements taken from OJO's Terms of Service that all, effectively, show that OJO takes no responsibility for their recommendations.
"OJO will process lead inquiries from a variety of sources including but not limited to: your brokerage's website, your brand's website, and leads you have acquired from the major national search portals (e.g. Zillow, Homes.com, Realtor.com, Trulia, etc.)."
"We ingest your leads from your various sources (website, Realtor.com, etc.) in real time and will call leads in as quickly as 10 seconds. We do the legwork to get a customer on the phone and facilitate the live transfer to the first-available agent once a buyer is ready to be connected."
"By using the OJO services, you agree to receive phone calls and text messages from us and our partners. By using the OJO services, you expressly authorize OJO, its affiliated companies and its partners (described below) and each such entity's employees, contractors and software (collectively, "Service Provider") to communicate with you by phone and text at the wireless phone number provided or any other number that you may provide in the future. You understand that message and data rates may apply based upon the terms of your wireless service provider contract. You also agree that methods of contact may include use of auto-generated text messages or an automated telephone dialing system, even if you've registered that number on a Do-Not-Call registry, and that my consent to text messages and phone calls is not a condition to using any Service Provider's services. If you do not consent to receive these texts or calls, do not use the OJO service or provide your information to us."
"We do not endorse or recommend the products or services of any service provider and are not an agent or advisor to you or any service provider. We do not validate or investigate the licensing, certification or other requirements and qualifications of service providers. It is your responsibility to investigate any service providers before you engage them. You acknowledge and agree that these service providers are solely responsible for any services that they may provide to you and that we are not liable for any losses, costs, damages or claims in connection with, arising from, or related to, your use of a service provider's products or services."
"OJO is not a real estate agent or lending institution or other service provider. Instead, we, through the OJO services, may help to connect you with service providers that might meet your needs based on information provided by you. OJO does not, and will not, make any credit decision with any service provider referred to you. OJO does not issue mortgages or any other financial products."
"By accepting a referral to one of our Referral Partners, you grant us permission to share your User Data with the Referral Partner so that they may offer their products or services to you."
"When you accept a referral to one of our Referral Partners, you acknowledge that you are purchasing any products or services offered by the Referral Partner directly from them and that OJO is not a party to any agreement between you and the Referral Partner with respect to those products and services; and OJO is not responsible for that Referral Partner's products or services, the content therein, or any claims that you or any other party may have relating to that Referral Partner's products and services."
"By using the OJO services, you hereby release us of any and all losses, costs, damages or claims in connection with, arising from or related to your use of a service provider's products or services, including any fees charged by a service provider."
Clearly, OJO is a biased platform designed to funnel consumers toward brokers who pay them a kickback at the close of consumers' transactions. Consumers using OJO Labs have zero control over what agents the company shares their information with. Instead of being "scrubbed" and "sold as leads" consumers looking for a competitive and fair representation can consider negotiating directly with real estate agents, or with help from unbiased consumer-focused online services that do not collect referral fees.
According to OJO Labs, "When a consumer is ready to connect with an agent, up to five qualified agents are contacted via text message. The first agent to respond wins the opportunity. Upon responding to the consumer notification, the agent will receive a phone call for a warm transfer within one minute. This phone call must be answered promptly or the consumer introduction will go to another agent."
OJO Labs doesn't care which agent, specifically, picks up the phone first, but it does care that the match is made only to someone in their referral network.
"After the introductory call with the consumer, agents will receive a text message with a link to update their profile in the Agent Dashboard. Agents will then receive bi-weekly reminders to update their buyer and seller profiles as they move further down the path toward closing on a new home."
This process is established to keep OJO Labs informed about what stage of the transaction process the consumer is in. OJO Labs needs to understand when the broker will close the deal and when it will receive a referral fee from the sale or purchase of the home. This means that OJO Labs receives intimate details about consumers' transactions from Partner Agents.
According to one OJO Lab Partner Agent, Sharon S. from Atlanta, GA, "Signing up was really easy. I also love that I can choose what kinds of leads I want and they show up on my phone. I'm talking to new clients within a few minutes. It's pretty neat."
Of course, this is a neat consumer brokering scheme, where agents pick "what leads they want" and consumers are steered only toward agents who choose to cut in OJO Labs with a major share of their commission. In this scenario, consumers' needs are "ingested" and "warmed-up" for the agent.
In reality, OJO Labs is a broker-to-broker collusion scheme that scrubs consumer's information and passes it along to a colluding broker who is willing to pay for it with a cut of their commission. All Partner Agents agree to pay OJO Labs a pre-arranged referral fee, on all closed transactions, through their employing broker. A referral agreement between OJO Labs and a Partner Agent for a random transaction that may or may not happen sometime in the future is executed in advance.
OJO Labs engages in consumer and market allocation schemes with Partner Agents brokerages, because it is a broker itself. Instead of representing consumers to help buy and sell homes, this "paper" brokerage actively disengages from its licensed activities so that every Partner Agent knows that OJO brokerage will not compete with them. OJO Labs does not act in a real estate brokerage capacity, instead, their real estate license is used to collect a blanket referral fee from the largest number of brokers possible.
Sherman Act effectively requires all active real estate brokers to proactively compete for consumers. An agreement or an understanding between brokers not to compete for a mutual profit is a "per se" violation of antitrust regulations in the United States.
The amount of a referral fee between brokers must be negotiated with respect to an individual transaction. It is a per se violation of the Sherman Act for real estate brokers to agree on a "standard" referral fee that will be paid for producing a client. Real estate professionals are not allowed to enter into blanket referral agreements between one another because such agreements always restrict free trade.
Brokers are not allowed to organize their operations into any collusion schemes and networks, and instead, all brokers must compete for consumers on a fair playing field. Legitimate agents who choose to not engage in the OJO referral scheme are harmed as well because consumers are steered away in a highly competitive real estate market.
To comply in good faith with RESPA (12 U.S.C. 2607) Section 8 exception for cooperative brokerage and referral arrangements, legitimate real estate agents must render referral agreements in a particular instance for a particular transaction.
Actions of OJO Labs "paper" brokerage directly increase the costs of owning homes in the United States due to added blanket referral fees, consumer allocation practices, and reverse completion between brokers. Partner Agents in the scheme have no incentive to compete for consumers with lower fees, instead, they have an incentive to compete for OJO Labs' attention. In this scheme, both colluding parties benefit from offering consumers higher commissions. OJO Labs promotes Partner Agents as somehow "superior" to those outside of the network, thus limiting free-market competitive forces and steering consumers in self-interest toward a network of very few agents who chose to agree to participate in the scheme.
As a licensed brokerage, OJO Labs owes absolutely no duty of care to consumers and takes no responsibility for the transaction, despite receiving a direct financial benefit from the home sale or purchase completed by a third-party referred brokerage.
OJO Labs is a 'paper' real estate brokerage. Agents agree to pay OJO Labs a referral fee, on all closed transactions, through their employing broker. OJO Labs does not offer any representation services. OJO Labs is a consumer brokering scheme that works to receive a cut of agent's commissions with the use of blanket referral agreements.
Yes and No. OJO Labs is a pay-to-play platform. OJO Labs only matches consumers with real estate agents who have agreed to pay referral fees back to them after the home sale or purchase transaction is complete. OJO Labs does not match consumers with the vast majority of agents who have not signed their blanket referral fee agreement.
OJO Labs directly competes with several broker-to-broker blanket referral fee schemes, including Zillow Flex, Realtor.com Opcity, Redfin Partner Program, Opendoor Brokerage, Rocket Homes, Better Real Estate, mellohome, Sold.com, Xome, HomeLight, LemonBrew, Radius Agent, ReferralExchange, Nobul, NAEBA, agentpronto, effectiveagents, topagentsranked, myagentfinder, UpNest, Clever Real Estate, and others.
Genuine alternatives to OJO Labs are unbiased real estate platforms, open marketplaces, and consumer review portals that offer reliable information without any pay-to-play bias.
Pros: there are none with OJO Labs. OJO Labs is a 'paper' broker that operates a consumer steering scheme with a network of independent brokers. Consumer allocation between brokers holds no tangible value to any consumer, either when buying or selling a home.
Cons: there are several main disadvantages to OJO Labs. First, consumers are hiring two brokers for the work of one. Second, OJO Labs takes a hidden referral fee, so the referred agent is unable to offer their full value to consumers. Third, OJO Labs only recommends paying agents to consumers, leaving out the vast majority of honest agents who refuse to participate in the scheme.
Summary: OJO Labs steers consumers toward their network of brokers and away from others. OJO Labs cannot legally organize brokers into a network because blanket referral agreements, consumer allocation, and market allocation between licensed real estate brokers in the United States are prohibited.
Your review has been successfully received. Please allow 24 hours for your review to become available.
Feel free to contact us if you need further assistance. At HomeOpenly we aim to make the opportunity of homeownership transparent, affordable and an open experience.