AgentIndustry News

Agents offered a cut of price protection contracts

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

A company that offers price protection contracts to home buyers is offering real estate brokers and agents a 10 percent commission to sell their product, or about $300 on the sale of a median price home. EquityLock Financial Inc. charges 1.5 percent to 2 percent of a home's sale price to provide 15-year contracts that provide a hedge against falling home prices. The company's referral program for Realtors and other real estate professionals pays 10 percent commissions. Because the price protection contracts are purchased outside of the closing process, they are not subject to the Real Estate Settlement Procedures Act, said Omar Pedraza, the company's director for new markets. The contracts may be purchased by existing homeowners or buyers, or offered by sellers as an incentive. Pedraza sees the price protection contracts as a good marketing tool for developers and builders who need to unload excess inventory. "The easy market is the developer looking to differentia...