Real estate rebates and referrals with a twist

EPerks, a company that launched last year that seeks to build a consumer audience and a pool of subscribing real estate professionals during a challenging time in the U.S. real estate market, combines real estate lead generation, referrals, rebates, agent profiles and reviews, and map-based searches into one portal.

The Pleasanton, Calif.-based company has already stirred up controversy and riled some industry professionals for a pay-per-review marketing campaign and legal threats against a blogger.

Real estate professionals pay a subscription to belong to ePerks, and they also pay a referral fee to ePerks -- a licensed broker -- when deals close.

The subscription fees can vary depending on whether the user pays to share leads from a ZIP code area or owns exclusive rights to leads for a ZIP code area.

EPerks pays out the consumer rebates as a portion of the referral fees that it charges to participating real estate professionals.

Ben Behrouzi, president and CEO for ePerks and co-founder of lead-generation company Reply.com, said the company is licensed in about 38 states -- the company does not do business in those states that do not allow real estate rebates to consumers.

The U.S. Justice Department has taken action to reverse real estate rebate restrictions in several states, and a "Competition and Real Estate" Web site set up by the DOJ's Antitrust Division states that there are 12 states that do not allow real estate brokers to offer cash rebates to consumers: Alabama, Alaska, Iowa, Louisiana, Kansas, Missouri, Montana, Oklahoma, Oregon, Mississippi, New Jersey and Tennessee.

DOJ attention to rebate restrictions has not killed the rebate debate: Inman News reported that lawmakers in Illinois were considering legislation to restrict real estate rebates to consumers, though that legislation has not moved forward.

EPerks requires that participating agents' brokerage companies receive a minimum 2.5 percent of a home's sale price as a commission in a real estate transaction, representing either the seller or the buyer.

The company charges a 19 percent referral fee for transactions that are closed by consumers who work with a participating real estate professional. If the agent advertises a "15.5 percent discount" at ePerks, as an example, then 15.5 percent of the real estate professional's commission is paid to the consumer by ePerks, with ePerks keeping the remainder, or 3.5 percent.

Agents can choose to up the ante for how much they are willing to offer as a discount. Some agents offer discounted services of 50 percent or more through the site, Behrouzi noted.

EPerks is not without critics, and the company's marketing strategy to pay bloggers to promote the company in some ways backfired. The publicity about the company's pay-per-review campaign drew some flack from real estate bloggers. Behrouzi said the paid blogger marketing campaign was just one of several company strategies to spread the word about ePerks.

"Paid blogs -- those are good mechanisms to begin getting the word out to folks in a particular market," Behrouzi said. The company incorporated this pay-per-post marketing approach when ePerks first launched and may use it again, he said, though the company is also using other channels such as online advertising at major search sites, television ads, and radio and print ads.

"We're approaching (advertising) from every angle," he said.

One real estate blogger, who had initially written a paid post about the company, later clashed with the company and its law firm when he wrote several follow-up posts, including one that questioned whether ePerks was a "scam or a gem."

That blogger, Volodymyr "Vlad" Zablotskyy of Go-Beyond-MLS.com, this month announced at his blog that he received a letter from an ePerks lawyer related to the online discussion about the company.

The letter requests that Zablotskyy cease alleged "ongoing efforts to unfairly disparage and slander ePerks.com through the dissemination of false and/or manufactured information. Any resistance to our demands will be met with swift and decisive action."

The letter refers to the "scam or a gem" blog post and other blog posts, and states that the company has determined damages "as a direct result of your activities ... in multiple hundreds of thousands of dollars."

Behrouzi said that the company's legal team is "considering filing a suit" against Zablotskyy "and an organization this individual is affiliated with."

Zablotskyy, a former New Jersey real estate agent, told Inman News that some folks who commented at his blog site had "some very nasty things to say about the company," and some comments suggested that agents were having trouble canceling their ePerks accounts when they decided to part ways with the company.

Zablotskyy said he suspects that some blog comments that were unusually favorable to the company may be from individuals connected to the company.

Behrouzi also said that there appeared to be some "false statements from phony individuals" among the blog comments, and he said there hasn't been any systemic problem with the site's billing. "No one has been charged if they have canceled. We charge up front. We don't force anybody to be in the program for 12 months. We don't force anybody to sign up for more than one month."

While some agents have complained that the company's monthly subscription fees are tough to stomach given the topsy-turvy housing market, Behrouzi said that the lure of rebates should work to agents' advantage as consumers seek to get money back on real estate deals.

"What we do is give you a real substantial discount. The consumer is motivated when they come to our Web site," he said.

"A lot of organizations out there are already geared to rebates. Buyers understand how it works, sellers understand how it works," he said. The company is finding more interest from home buyers than sellers in the current market, he said.

Some Web sites offer free competition to ePerks by allowing agents to enter profile and contact information and to post property listings information at no charge, but Behrouzi said those sites may have a different audience.

Fernando Bartolomei, a Realtor for RE/MAX in Fayetteville, Ga., who is an ePerks participant, said the company seems like a great concept but he hasn't seen much business from it yet. He said he has spoken with another ePerks participant who hasn't yet closed a deal from the site.

"I'm thinking of canceling. Things are tough right now to be (spending) money," he said, adding that he pays $129 a month for an exclusive ZIP code area. Bartolomei also said he'd like to see more advertising by the company to promote the ePerks brand.

Phyllis Esposito-Doyen, a Realtor for RE/MAX Right Choice in Trumbull, Conn., said she signed up for ePerks in January and she hasn't received any new clients yet through the site. "I was under the impression that I would be e-mailed clients," she said.

Besides offering service discounts for real estate brokers and agents, ePerks also offers discounts on car purchases and home-improvement contractors. Behrouzi said there are plans to add a broader range of services, too.

Since the company's launch in summer 2007, there have been about 300 transactions originating from ePerks, Behrouzi said, and there are about 2,700 real estate agents active at the site.

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