"trader_4" wrote in message
...
On Saturday, August 30, 2014 10:02:29 AM UTC-4, Pico Rico wrote:



Here is their patent application 20140188660.



http://appft.uspto.gov/netacgi/nph-P...AND+commission




Hat's off to you for finding that. Who would ever think they would try to
pattent this thing. The patent does give a much better understanding of
how the whole thing works.



Thanks.



It looks like they are struggling in the patent office: this was
originally

filed in 2006, and they have had to file a couple continuations. That is
a

long time, even considering the slow pace of the patent office.



If they can patent this, it will be remarkable.

I would love to read the file history.





It does say the contract may be recorded.



Yes, I saw that too. But they only say that is an option and they also
don't refer to it again in the various descriptions of the process flow.

patents are always written with lots of "may" and "if desired". They want
as broad coverage as possible. Anybody doing this and NOT recording the
contract or an abstract of contract would be a fool.

We don't know what the actual contract they are using says, because you
can't see it. Which for me is another red flag. The contract should be
on the website.

I am not sure it is a "red flag" to me, but I woud sure want to read the
contract and its fine print very early in the process, not AFTER they have
all my information, have tried to evaluate my house, etc. etc. But if I
were them, I would play these cards close to my vest. Hmm, maybe that IS a
"red flag"!




It does say they will get a cooperating brokers fee of 1% or 2%. Not a

paltry "referral fee" as suggest by others.


They can say anything they want. But I'll bet they aren't collecting it.
The realty firm is collecting 3% typically, which they acknowledge in the
patent application. I don't see many realty firms giving up 1/3 of their
commission. Also, buried in there, they seem to be saying that it
actually
costs the realty firm nothing, because it comes out of the individual
agents
share. That would be something. Right now the firm collects 3%, the
agent
is getting maybe 1/2 of that, 1.5% and the company seems to think that the
agent should hand over 1 to 2%? Does not compute in my world. I'd bet
that what they are actually collecting on referals is a lot less.

If their contract has 1% built in, there will be major issues. And telling a
broker that it is all coming from his agent's cut means agents will find
other properties to work on.

One thing to note is that commissions are negotiable. There is a lot less
room for a home owner to negotiate commissions downward when there is
already a cooperating broker commission in place.



They also say that the value of the gift cards should be less than 1%
of the property value. That also doesn't compute with what they have
on the website. For example, on the web they say that for a $300 - 499K
house, you get $1000. That's 2 to 3.3%.

Have a bit more coffee. that is 0.33% to 0.2%




Also there are curious
discontinuitues, ie if the house is $500K - 999K, you get $2,000.
What's up with that? I would think that would make all kinds of
trouble, people arguing over whether the house is really worth 499 or 502,
etc.

not only discontinuites, but very wide bands. My $999k house gets me the
same gift cards as a $500k house? No way!





"A further qualification in accordance with an aspect of the present

invention is to engage with real estate brokers who commit in advance to
a

preset sharing of commission with the party who secured the commitment of

the future listing by the homeowner. For instance such a qualification
may

be that the party will be paid a percentage of each sell-side commission

ranging from 1.5%-1.8% of each home's value."



"In accordance with another aspect of the present invention, the written

agreement with Cooperating Brokers may include entitlement to a second

referral fee from the Cooperating Broker to whom the party provided the

homeowner for a listing if the referred property seller uses a
Cooperating

Broker for the concurrent purchase of a new home. "


That's mostly a nit, not many home buyers are going to be using the
same broker to sell their current home and buy a new one, but it's not
unreasonable.

they would be fools not to write this in.






It does say they may be paid through escrow.



It does say "Failure to cooperate will generate the filing of Lis Pendens

prior to sale."


Yes they can do that, to collect the referral fee they are due. My
main point was there were some folks in this thread suggesting that
it was a "scam", they were never going to give you the gift certificates
and that they were still going to come pursue you in court.



I always assumed they would give the gift cards. They have a sweet deal if
they can pull it off, so why blow it by not providing the gift cards (which
they receive at a discount, most likely).





It also says they may use this as a hook to get referral fees from other

related businesses:



"In addition, as the party will likely be the first in the country (other

than the homeowners) to know when the homeowners are about to sell, the

party will have many opportunities to reap additional rewards through
repeat

business and additional referral fees from various vendors for services
such

as: movers, title insurance, homeowners insurance, lawn care,

telecommunications services, refuse removal, storage space, home repair,

energy and more. "

Yes, that's a new angle no one here thought of. Not unreasonable though.

I thought that was smart, too. And the homeowner is not locked in
beforehand.


I would hope that there would be agreement that while people may have
various issues with the whole concept, from all that is evident at this
point, it is not a "scam".

I probably used "scam" in the wrong sense. It seems like such a ridiculous
thing for a homeowner to sign up for, particularly YEARS in advance. But
outright fraud is unlikely.