Rocket Homes is a referral fee network designed to collect fees by matching consumers with local real estate agents willing to participate.
Rocket Homes operates as a licensed Michigan real estate brokerage Rocket Homes Real Estate LLC License 6505-346028, 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 Rocket Homes, this information is simply sold to real estate agents who are willing to pay for it with 25%-40% share of their commission.
Rocket Homes revenue comes from referral fees and sale of user data.
Rocket Homes is a Michigan real estate broker that collects an undisclosed referral fee (estimated at 25%-40% of agent’s commission) 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, Rocket Homes is a real estate agent that “does not engage in actual real estate broker services.” Rocket Homes systematically applies pay-to-play bias towards all matching results, meaning, only real estate agents that have agreed to pay a referral fee are matched with consumers.
Rocket Homes 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.
Rocket Homes further claims to match consumers with “top-rated professionals,” but there is absolutely no third-party evidence for this. Rocket Homes Terms of Service directly states that “it does not guarantee or warrant the products or services of other product or service providers to whom it may refer you, including, but not limited to, real estate brokers/agents, lenders and escrow/settlement companies.”
The main qualification for real estate agents who participate with Rocket Homes is their willingness to pay a referral fee. Rocket Homes is an affiliated brokerage of Quicken Loans. Quicken Loans is unable to collect referral fees from real estate agents directly due to rigid RESPA regulations. Instead, Quicken Loans is using Rocket Homes’s license as a loophole to bypass RESPA provisions that were designed to protect consumers from illegal kickbacks between real estate agents and mortgage companies.
Rocket Homes plays hidden referral fees down to consumers, but it rigidly locks every participating real estate agent 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 Rocket Homes works under the Business and Professions Code and RESPA.
Clearly, real estate agents only sign-up with Rocket Homes because the price of the referral fee can be easily incorporated into their client’s agreement with excessive commissions.
Rocket Homes receives the lowest score because it simply sells user information to third parties without any clear benefit to anyone other than itself. There are exactly zero benefits to consumers when using this referral fee network - the only effects consumers gain with Rocket Homes are hidden fees, privacy concerns and blind matches with agents willing to part with 25%-40% of their commission. This model incorporates in itself everything real estate process shouldn’t be. Rocket Homes must be well aware of these issues but continues to operate on pay-to-play methodology in order to collect fees that needlessly make home buying and selling more expensive.
Rocket Homes is a broker referral fee network designed to collect fees by matching consumers with local real estate agents willing to pay it. When consumers submit information to Rocket Homes, their information is shared in exchange for blanket referral fees with real estate agents in a process known as a blind match.
Yes and No. Rocket Homes revenue comes from undisclosed referral fees. Blanket referral fees set by such networks range anywhere between 30%-40% of the entire agent's commission. Rocket Homes is a pay-to-play scheme that offers biased matches for financial gain. The main qualification for real estate agents who participate with Rocket Homes is their willingness to pay a referral fee.
Rocket Homes directly competes with several broker-to-broker blanket referral fee schemes, including Zillow Flex, Realtor.com Opcity, Redfin Partner Program, Opendoor Brokerage, OJO Labs, 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 Rocket Homes 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 Rocket Homes. Rocket Homes 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. Rocket Homes is under an investigation by CFPB.
Cons: there are several main disadvantages to Rocket Homes. First, consumers are hiring two brokers for the work of one. Second, Rocket Homes takes a hidden referral fee, so the referred agent is unable to offer their full value to consumers. Third, Rocket Homes only recommends paying agents to consumers, leaving out the vast majority of honest agents out of the scheme.
Summary: Rocket Homes steers consumers toward their network of brokers and away from others. Rocket Homes cannot legally organize brokers into a network because blanket referral agreements and consumer allocation between licensed real estate brokers in the United States are prohibited.
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