Discount web brokerage CondoDomain will eliminate its cash back rebate program as of Jan. 1, a post on the company’s blog said.
The company had been offering a 20 percent rebate on commissions to buyers.
"We have determined to put that 20 percent into our end product and invest into becoming a better company, with better technology, better agents – because that is what our current clients have told us what is most important in the homebuying experience," founder and CEO Anthony Longo wrote. The firm said it had offered over $1.2 million in rebates since launch.
Founded in Boston in 2005, CondoDomain began as a web-based lead gathering service for brokers, before expanding into full-service brokerage. It launched in New York City, Washington, D.C., Baltimore, and Chicago in early 2010.
CondoDomain has proved willing to tweak its model before – at launch, it charged a $5,000 flat fee per transaction, which it dropped after about a year, after discovering that less than 5 percent said they chose to work with them because of the business model.
This second tweak was prompted by similar survey results, Longo told Banker & Tradesman. "In short – we have surveyed all of our clients for the past three years on multiple occasions and keep getting back the same results. The cash refund continues not to be a priority for people looking to buy or sell their home. In more than 250 surveys, only three clients indicated they choose to work with us because of the cash refund as their [No.] 1 reason," he said.
The move follows a trend of discount and web-based brokerages pulling back from offering rebates or cash back on commissions as the slow real estate recovery has dragged on. Earlier this year, national discount brokerage Zip Realty stopped offering buyer discounts, while discount brokerage Redfin decreased their rebate to Boston buyers from 50 percent to 33 percent of the commission.
Despite the changes, however, Longo asked customers "Please don’t lob us into the ‘traditional brokerage’ bucket. We never were a traditional brokerage and we never will be."
