Clever Real Estate is a brokerage licensed in Missouri. However, Clever does not provide any services that a brokerage typically provides. Instead, the only reason for it to be a licensed brokerage is to collect massive kick-backs from its affiliate agents.
Unfortunately, in doing so, Clever consistently portrays a false picture to consumers. In our investigation, we found Clever to be causing significant consumer harm.
We’ve spent hundreds of hours researching Clever Real Estate and its practices. In writing the opinion piece below, we have also consulted with real estate attorneys, title and escrow agents, and Clever affiliate agents. In addition we spoke to consumers who sold their homes through clever or considered Clever.
» Jump To:
- What is Clever Real Estate?
- How Does Clever Real Estate Work?
- How Does Clever Make Money?
- Selling/Buying with Clever Real Estate
- Why choose Clever?
- Why you should not choose Clever?
- Clever Real Estate Customer Reviews
- Pros and Cons of Using Clever
- Alternatives to Clever Real Estate
- Should You List With Clever Real Estate?
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 the 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.
🚩 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 earn 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.
As per Clever’s Service Agreement For Brokers, this is how much Clever earns from various types of transactions:
|🖇️ Conditions of Transactions||🤑 Clever’s Service Fee|
|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|
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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 2022, 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.
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⚠️ 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.
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.
This is Why You SHOULD Choose HOUZEO
|Companies||Listing Agent Commission / Fee||Nationwide coverage||100% Online||Mobile App For Customers||Offers Directly to You||Counter an Offer||Fast Listing Changes||Manage Showings|
|Clever Real Estate||$3,000||✅||❌||❌||❌||❌||❌||❌|
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
- Listing Fee: $399
- Available in 80+ U.S. Markets
- 4.9/5.0 (out of 2,219 reviews)
Houzeo provides an unbeatable combination of maximum savings, cutting-edge technology, and 5-star customer support.
Houzeo is the most popular and competitive platform for sellers looking for a full-service affordable options that will give maximum savings with minimum real estate agent interaction. Also, Houzeo is considered to be the best Flat Fee MLS and FSBO provider in the US real estate market.
💰 Houzeo is an advanced tech platform that allows home sellers to list their homes on the MLS for a small flat fee, working with a listing agent who doesn’t typically charge a commission. This saves you almost 50% of the agent commissions right away.
⚡ Package Customization: You can customize the packages as per your requirements and even opt for services like contract review, pricing assistance, professional photography, and more as per the requirement.
📱 Enjoy Cutting Edge Technology: Home sellers, after registering, get access to an exclusive seller dashboard where they can receive, review, and compare offers. The platform also allows features like contract updates, counteroffers, home showings, lockbox, yard signs, and more.
⭐ 5 Star Reviews: With superior reviews on Google and Trustpilot, Houzeo is also the most advanced For Sale By Owner (FSBO) platform in the United States.
🎈 Coverage: Houzeo has a nationwide presence
Zero hidden fees, MLS exposure, 100% automated process, Listing within 8 business hours with Houzeo Concierge, Buyer leads directly shared with the seller, Counteroffer feature, and Affordable full-service packages`
No other real estate company comes close to offering such features.
Houzeo is available nationwide.
Why is Redfin Better Than Clever?
|Companies||Listing Agent Commission||Nationwide coverage||Dashboard To Track Buyers||Mobile App For Customers||Concierge Service||Professional Photos||Assistance in Prepping your House|
|Clever Real Estate||1%||✅||❌||❌||❌||❌||❌|
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
- Listing Fee: 1-1.5% of the sale price
- Available in 80+ U.S. Markets
- 3.8/5.0 (out of 200 reviews)
Redfin is a well-known home search engine and discount real estate brokerage with licenced real estate agents who can help you buy or sell a home.
Redfin’s primary offering is a discount on services for homeowners who are selling their homes. A 1.5 percent listing fee will be charged, rather than the traditional 2.5–3 percent fee charged.
The most significant potential tradeoff is in the area of service. The lack of hands-on support provided by Redfin agents, according to some customer reviews, can result in mistakes such as underpricing a home.
💰 Save on commission fees: When you opt for Redfin over a traditional home-selling method, you can save up to 20% – 30% on the commission fees. Though, trying to provide their service 3x faster than the traditional method could limit their ability to provide you with personalized service.
✌🏻Additional services: The discount realtor has a thorough listing agreement but it takes approximately 18 days to get a property listed on the MLS. With Redfin, you get add-on services like a professional photographer, MLS listing, open house schedule, yard sign, and much more.
📱 Good technology: It has one of the best technology among different discount real estate brokers. They have a powerful platform that is ideal for full-service brokerage. Redfin houses a fantastic user interface for sellers to make their job easier.
Redfin has an on Consumer Affairs.
Redfin covers 80+ Markets in the United States.
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.
💸 It’s NOT CLEVER To Use Clever Real Estate
Rather opt for Houzeo. Houzeo reveals all its prices and rates upfront. Sell your house with Houzeo.com for a small flat fee – as less as $229!
START YOUR MLS LISTING NOW
Real People, Real Stories
Frequently Asked Questions
What are the alternatives to Clever Real Estate?
There are various alternatives to Clever Real Estate. You can opt for Redfin Now which offers its services at discounted rates. You can also opt for Houzeo which offers various flat fee packages and is upfront with all its prices.
What are the pros and cons of Clever Real Estate?
Pros of Clever Real Estate are:
1. Clever offers its services for a 1% commission. Cheaper than other agent referral companies
2. Good customer rating of 4.9 stars on Trustpilot
3. More than 12,000 affiliated agents. Can help you find an agent nearby
Cons of Clever Real Estate are:
1. Clever does not disclose all costs upfront
2. Clever fixes commission with sellers/buyers leaving no room for them to negotiate
3. Customer testimonials suggest their agents are not up to the mark
4. Clever does not value consumer privacy
5. You will waste a lot of time interviewing agents
Who owns clever real estate?
Clever Real Estate (Clever) was founded by Benjamin Lee Mizes, Jake Cardenas, Jeremy Decker, and Luke Babich in 2017.
Is Clever Real Estate Legitimate?
Clever Real Estate is a legitimate company. It is an agent referral company that matches buyers/sellers with the agents nearby.
Where is clever real estate located?
Clever is a licensed brokerage in St. Louis, Missouri..
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