On Friday, Chicago real estate brokerage Dream Town Realty launched a week-long deal on Groupon, hoping to tap the popular social buying model to attract clients.
Dream Town says it is the first company to offer a residential real estate deal through Groupon. The firm joins a list of businesses in diverse sectors experimenting with a group buying as a novel marketing strategy.
Earlier this year, Virgin American ran a Groupon with steep discounts on airfare between Chicago and the West Coast. Movie studio Lionsgate offered tickets for “The Lincoln Lawyer” through Groupon last month, and Ajilitee, a Rolling Meadows-based information technology consulting firm, recently took the honor of priciest Groupon to date by selling $25,000 worth of services for $12,500.
In the Dream Town deal, the brokerage will pay out $1,000 in cash at closing to home buyers or sellers that spend $25 for the Groupon. The voucher is good for one year from the date of purchase. The offer launches on Friday and will run for a week. On Monday, it will be the featured deal for Chicago subscribers.
The Dream Town deal tips with 50 vouchers purchased, said co-founder and president Yuval Degani. The coupons apply to both traditional and distressed properties, and buyers can be owner-occupiers or investors. The transaction must be at least $150,000 to qualify for the deal, and there is a limit of one Groupon per customer. There is no cap on the total number of Groupons that can be sold.
“Our big picture is we’re really an emerging company,” Degani said, noting that Dream Town has focused on its Web presence and search engine optimization, which helps its site appear higher on search results. “What we’re trying to do is acquire new customers. We’re not really looking at (the Groupon deal) as a reduced commission. We’re looking at it as getting customers for life.”
Degani said Dream Town has four locations and 165 agents in the area.
Article states: “The Dream Town deal tips with 50 vouchers purchased, said co-founder and president Yuval Degani…There is no cap on the total number of Groupons that can be sold.”
Not sure if I understand that. Is there a limit, or not?
i think it means there is a minimum requirement but no maximum limit. If only 49 sell then your groupon isnt valid.
Tony, it’s what Nick said.
Groupon deals require a minimum amount of participation but there is no limit on how many can be sold.
This usually comes more into play for restaurants and the like. They’ll say, example, that 200 have to be sold to “tip” or become a valid offer. Most offers do tip, but some may not.
Thanks, nick and Spike. Gotcha.
Great idea for publicity, but not much of substance. Quite a few agents today will give buyer a $1000 credit on a 150K home. All you got to do is ask him/her and if the agent gives you the BS line that “our agency’s policy does not allow us to do that”, just go with a different agent/company. On a more expensive home you can do much better than 1K.
Another issue is that in some instances (depends on the loan type), if not shown on the RESPA, the credit may violate federal laws.
Is it just me? The English language seems the be getting butchered in these newspaper articles. The first paragraph reads terribly to me.
aloof – i agree – it’s a frag – should read
On Friday, Chicago real estate group DT lauched a week long deal on Groupon. They are hoping to tap the….
Only $1,000? Not a very big enticement.
Interesting idea – the rebate is from the broker’s buyer’s agent side of the commission so it will be listed on the HUD for the buyer to get it. Commissions are negotiable but if your agent gets you a great deal on a home why do you want them to give you part of their paycheck also? We are one of the few professions that does work up front without any upfront money and only get paid if the deal closes. Especially on the buyer’s side when we are “paid” by the coop that is offered by the listing agent and not directly by the buyer unless there is an exclusive buyer’s agreement that if the seller’s commission is less than a certain percentage that the buyer will pay the difference.
Realtors commission are broken down and different people get parts of it. Remember we have to pay for our own expenses, taxes, advertising etc. The average realtor makes $26K across the nation. So much for a glamorous high paying career.
qss & Evelyn,
I agree with both of you. Don’t forget about how we sometimes need to also pay for a warranty or help them move to close a deal. Save $25 on the coupon and just work with a Realtor you know and trust.
Save the $25. In today’s market, I guarantee you that this brokerage would offer you the same deal without the coupon. Discount brokers equal discount service. You’ll end up paying more for your dream home!
I have to ask:
Does this need to be disclosed on the HUD-1 per RESPA? Is this even legal? Can this be construed as an “inducement” or is it simply a reduction in commission?
The offering of an inducement is legal in the State of Illinois. Money can only be offered to a participant in the transaction. So if an agent wanted to rebate all of their commission to the buyer they can do that. Regarding RESPA agents aren’t part of the transaction so there is no violation. There may be a question of taxes to be paid on rebate and will a 1099 be issued. The point is Dream Town is being creative on getting it’s name out to the public. I tip my hat to them.
Big deal. The realtor will just jack up the commission rate to offset $1k payout to anyone who buys this “deal”. PT Barnum had it right.
HouseTipper has been using the group buying model to offer Real Estate deals for several months now. Agent deals, leasing deals, condo sales deals etc … http://www.housetipper.com
An agent can not “jack up” their comission whenever they feel. The commission is something negotiated between the seller and the agent, and an agent’s commission split is something that is negotiated and set between them and their broker.
Here is another great way of using coupons, which i found in the following link, which makes you more independent on which coupons you want to use instantly.
http://supermarketnews.com/marketing/kiosk_coupons_0404/index.html
Glad to see Groupon expanding into different markets. Just one question Groupon…WHEN ARE YOU GOING TO OFFER LOCAL DEALS CLOSER TO HOME?
You see, I thought for a long time I was missing the Groupon boat because I live too far away from town. But after doing a little research, I found Steals4All.com a site that gathers all the daily NATIONAL Groupon deals available to buy, regardless of where you live.
Now I can get an exhausted list of national deals that I can buy. Now I just hope one day Groupon will venture off into my little community.
Glad to see Groupon expanding into different markets. Just one question Groupon…WHEN ARE YOU GOING TO OFFER LOCAL DEALS CLOSER TO HOME?
You see, I thought for a long time I was missing the Groupon boat because I live too far away from town. But after doing a little research, I found http://steals4all.com a site that gathers all the daily NATIONAL Groupon deals available to buy, regardless of where you live.
Now I can get an exhausted list of national deals that I can buy. Now I just hope one day Groupon will venture off into my little community.
hii…
i want to know is there any limit?