Clever Real Estate Reviews: Consumer Warning & Alternatives

Clever Real Estate is a brokerage licensed in Missouri. However, Clever does not provide any services that a brokerage typically provides. Instead, Clever advertises itself as a “free” service to home sellers and home buyers. Once these sellers and buyers signup, Clever sells their info to agents in return for a 25% to 40% “Service Fee”.

Our team of expert real estate researchers has spent hundreds of hours researching Clever Real Estate and its practices. In writing this opinion piece below, we have also consulted with real estate attorneys, title and escrow agents, and Clever affiliate agents. We also spoke to consumers who sold their homes through clever or considered Clever.

What is Clever Real Estate?

Clever Real Estate (Clever) is a licensed Missouri real estate brokerage. It was founded by Benjamin Lee Mizes, Jake Cardenas, Jeremy Decker, and Luke Babich in 2017.

Clever, however, does not provide any services a traditional brokerage would provide.

Clever uses marketing to get home sellers and buyers to submit their contact information. Clever then stores consumer information as leads in its database. Clever does not service the leads themselves. Instead, Clever sells those leads to affiliated agents for a “Service Fee”. This Service Fee typically ranges between 25% to 40% of the total commission the seller pays at the time of closing.

Clever does not disclose this service fee either upfront or in the Settlement Statement when the property is sold. They allow you to believe that the service is free, even though you’ve paid thousands of dollars to use Clever.

🚩 BEWARE: Although Clever is a licensed brokerage in the state of Missouri (License # 2017042277), it does not offer any services a traditional brokerage provides. Instead, Clever presents itself as a free service, collects your information, and sells it to agents within its network for a “Service Fee” which can be thousands of dollars.

How Does Clever Real Estate Work?

For any real estate transaction, you need a willing seller and a willing buyer. A real estate agent acts as a middleman to facilitate the transaction. A typical U.S. real estate transaction in fact involves 2 real estate agents.

Through shrewd marketing, Clever inserts itself as the middleman of middlemen. Clever connects consumers with agents, and for that, charges 25% to 40% of the commission as the Service Fee.

Clever also offers a rebate if a customer sells as well as purchases property using their services. But this comes with a catch. You are eligible for this rebate only if the purchase value of the house is more than $150,000. And Clever will collect 40% of the commission as a “Service Fee”.

How Does Clever Make Money?

Clever Real Estate claims Clever is “100% free”. This is not true.

Clever Real Estate attracts home buyers and sellers to its website using Content Marketing, SEO, and PPC campaigns. Then it collects the property and contact details of those buyers and sellers in its database via an online form and converts them into leads.

Clever forwards those leads to its affiliated pay-to-play real estate agents. The pay-to-play agents convert the lead into their “Clients”. Once the transaction closes, the pay-to-play agents pay Clever a “Service Fee” within 10 days of the closing date.

Clever’s Service Fee Paid from Commission Home Sellers Pay:

If the home is sold for less than $125,00	25% of the gross broker commission
If the home is sold for more than $125,000	Greater of $1,000 or 25% of the gross broker commission
If the broker represents the buying side	Up to 40% of the broker commission

 

Calculate Your Savings: Traditional Agent vs. Ideal Agent vs. Houzeo

Clever agents charge 1% commission. Of that commission, Clever receives a 25% to 40% kick-back. With Houzeo, you will save that entire commission. And there are no kick-backs at closing.

Selling/Buying With Clever Real Estate

To sell or buy a house with Clever, you need to first provide your personal information, and the details of the property you are looking to sell or buy.

Clever saves your information as a lead. The leads are then forwarded to Clever’s pay-to-play agents. Agents will call you to schedule a time for an in-person interview.

Once you select a Clever pay-to-play agent, you work directly with that agent. Clever from that point on doesn’t engage much with its leads. Customer testimonials confirm that once you finalize the real estate agent, Clever does not interfere much in the process.

This can be a risky prospect for sellers as well as buyers. There is no guarantee that the agent assigned to you is high-quality and will deliver up to your expectations. And since Clever doesn’t interfere much, customers are left to deal with such agents on their own.

Clever also claims that its agents are not discount agents. We found this to be false – several agents we spoke to offered discounts and cheaper services.

✅ Why You Should Choose Clever

If you care about protecting your personal confidential information, you should not.

It is true, that Clever’s rates are comparatively cheaper than other companies that operate on a similar model. We believe this is the only positive aspect of selling your house with Clever.

The downsides are very significant, as we’ll discuss below.

🚩 Why You Should Not Choose Clever

Clever’s 1% commission for home sellers is too high. It’s 2023, and with technology, home sellers can list and sell their homes for a mere few hundred dollars.

For home buyers, Clever’s 0.5% rebate is miniscule. Houzeo and Redfin can get you significantly more in buyer rebates.

🚫 Clever Real Estate Misrepresents Its Service as “Free”

U.S. Federal Trade Commission’s enforcement of state and federal Truth-in-Advertising laws requires companies to be:

• cautious when using the term “free” or “sale”.
• upfront and truthful about their pricings

Clever advertises its services as “100% Free”. That is untrue. Clever collects a substantial 25% to 40% of the gross commission of the agent as a “Service Fee”.

🚫 Clever Poses a Risk of Privacy Violations

Clever affiliated pay-to-play agents you work with are party to the transaction. As such, they are privy to your transaction documents including the ALTA statement.

Clever is not a party to the transaction, so it is not entitled to consumers’ private transaction information, including the ALTA statement.

Per Clever Real Estate’s Service Agreement For Brokers, Clever requires its affiliated pay-to-play agents to share the ALTA statement. This undermines the privacy protections consumers are entitled to under the Gramm-Leach-Bliley Act (GLBA) (sections 502(e)(1) and 509(7)(A)).

The excerpt below is directly from the “CLEVER SERVICE AGREEMENT FOR BROKERS”, signed by a Designated Broker, associated with Clever Real Estate, Inc.

🚫 Clever Allegedly Engages in Price-Fixing Violating Federal Antitrust Laws

Clever fixes the commissions with home buyers and sellers. This is then honored by more than 12,000 agents working with them. This violates Federal Antitrust Laws.

Also, the National Association of Realtors states that the agent and the home buyer or seller can negotiate commissions at any time during the transaction. Clever Real Estate is not a party to the transaction, but it fixes the commission upfront. In addition, it requires its pay-to-play agents to honor that commitment.

What Do Customers Have To Say About Clever?

Clever Real Estate has stellar reviews on Trustpilot, which is a paid review site. On free sites like Google Reviews, Clever has a mediocre rating of 3.8 stars out of 5 stars.

⛔ What Bothered Customers About Clever ⛔

Below are a few problematic aspects of Clever Real Estate that pose some major red flags for customers.

🤫 Clever Does NOT DISCLOSE All The Cost 🤫

As per customer testimonials, Clever Real Estate kept a seller in the dark about the additional closing costs. It was not until the seller asked the real estate agent did they come to know about the additional costs that are to be incurred by them.

Throughout the process, they were told that all they need to pay is $3,000 and 2.5-3% buyer agent’s commission.

Clever did respond to this review and claimed that the savings the seller received can help offset these closing costs.

 

⚠️ Clever’s Agents Are Not Up To The Mark ⚠️

We came across various customer reviews that suggest that Clever’s agents were not at all efficient. In some cases, agents tried to get the lowest possible price for the sellers and withheld offers.

This is expected. Clever claims it does not connect consumers with discount agents. We found that to be not true. Multiple Clever affiliated pay-to-play agents we spoke to offered discount services. Some primarily got their listings through discounted services – and that’s the definition of a discount broker.

🔍 Clever Does Not Monitor The Overall Process 🔎

Once the agent is assigned to the consumer, not much is handled by Clever. In the words of a customer “Clever didn’t put many guardrails around agent” and the seller had to guide the process themself.

This is also expected. A traditional brokerage would monitor their agents. Clever is not a traditional brokerage. It is a referral company and as such is not a party to the transaction.

It would be rather difficult for Clever to demand high-quality services from its affiliated pay-to-play agents because they don’t hang their licenses in Clever’s offices.

» Houzeo Reviews: Homeselling experience of Americans with Houzeo.com

Pros And Cons Of Using Clever Real Estate

Using Clever’s services comes with its advantages and some serious disadvantages. Below is a table to summarise all of these.

Reasons To Choose Clever	Reasons Not To Choose Clever
✅ Clever offers its services for a 1% commission. Cheaper than other agent referral companies	❌ Clever does not disclose all costs upfront
✅ Good customer rating of 4.9 stars on Trustpilot	❌ Clever fixes commission with sellers/buyers upfront leaving little room for them to negotiate
✅ More than 12,000 affiliated agents. Can help you find an agent nearby	❌ Customer testimonials suggest their agents are not up to the mark
	❌ Clever does not value consumer privacy
	❌ You will waste a lot of time interviewing agents

Alternatives to Clever Real Estate

We recommend two alternatives for Clever Real Estate that offer better services at affordable rates. They not only offer better services, and harness technology but also do not threaten your privacy or violate any laws.

1. Houzeo.com

This is Why You SHOULD Choose HOUZEO

Houzeo harnesses technology to enable home sellers to bypass real estate agents and the hefty commission associated with their services.

Unlike Clever, Houzeo charges all the fees upfront and works on a flat fee model that allows you to list your property for a small flat fee.

Everything You NEED To Know About Houzeo

2. Redfin

Why is Redfin Better Than Clever?

Redfin is a low commission real estate company that works on a model similar to Clever, but comparatively offers better services.

Though they charge commissions a little higher than Clever Real Estate, they offer various additional services such as 3D walkthroughs, assistance in staging and cleaning, professional photography, and a lot more.

More About Redfin

Other Options You Should Consider

1. Sell to iBuyers

iBuyers make an offer on your property within 24-48 hours and can close within 7 days or more. Most iBuyers like Opendoor and Offerpad are also known to offer the Fair Market Value (FMV) for your property.

Selling to an iBuyer has certain significant drawbacks. These include:

• Limited coverage, restricted to metro and urban areas
• Strict eligibility criteria without exceptions
• Non-negotiable offers
• 5% service fee
• 2% – 8% repair costs

👉 Our Take: We recommend iBuyers if your house meets the iBuyer company’s eligibility criteria.

» iBuyer Reviews: Check out rankings, pros, cons & alternatives of top iBuyers in America

2. Sell to “We Buy Homes for Cash” Companies

Unlike iBuyers, “We buy homes for cash” companies help you sell your house as-is fast. They can even close within 7 days or any date you choose. “We buy homes for cash” companies also make cash offers for homes outside metro areas or in difficult-to-sell locations.

Here’s why traditional cash home buyers could be a bad option for you than an iBuyer:

• They make lowball offers and offer only 50% – 70% of market value.
• Their offers are non-negotiable

👉 Our Take: We recommend selling to a cash home buyer if you are selling a distressed house “as-is” without looking for the best price.

» “We Buy Homes for Cash” Companies: Check out America’s biggest cash home buyer companies in 2023

“Cash for Homes” Companies Near You

3. Sell FSBO With Flat Fee MLS Services

Listing with a Flat Fee MLS service gets your house on the market within just 24-48 hours. Selling For Sale By Owner has increased substantially in the past few years, with 77% of FSBO homes being sold in less than 2 weeks.

Flat Fee MLS is one of the best ways to sell your house fast, and it has 4 major benefits:

• MLS is the fastest way to hit the market, plus your listing is syndicated to Zillow, Realtor.com, etc.
• Your listing gets maximum exposure.
• You can negotiate all offers.
• You skip paying commission or service fees.

👉 Our Take: We recommend Flat Fee MLS companies for most home sellers. They are fast, and you will save thousands in commissions.

» Websites for sale by owner: Check out the rankings for America’s best FSBO websites

Should You List With Clever Real Estate?

Clever claims to offer real estate services at discounted rates for free. This attracts a lot of buyers and sellers to its services. But on investigating further a very grim picture comes forward.

They allegedly violate a lot of laws such as The Gramm-Leach-Bliley Act (GLBA), Federal Antitrust Laws, etc that threaten your privacy. Not only this, customer testimonials suggest that their agents are also not up to the mark. They are also not upfront with their prices.

After knowing all of this, we do not recommend Clever Real Estate and its services.

We rather suggest much better services of Houzeo.

Houzeo offers all its rates upfront and is transparent about its services. With Houzeo you can list your house on the MLS for as less as $199. Houzeo offers you various options, wherein you can also opt for the virtual full-service package.

 

Check out some of the Houzeo reviews and how it has helped customers around the US.

Frequently Asked Questions

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