A Chicago-based real estate brokerage that wants to convert more visitors to its Virtual Office Website into clients is the first brokerage in the country to offer a deal through Groupon.

Dream Town Realty — a full service brokerage — is offering $1,000 cash at closing to buyers or sellers who purchase a $25 Groupon.

At midday Friday, less than 12 hours after it was made available for five days, the Groupon offer was rapidly approaching the 50-buyer minimum, and generating publicity for the company. There is no upper limit on the number of Groupon offers that will be sold, said Dream Town’s president and co-founder, Yuval Degani.

"Unlike a restaurant, which can overbook if it oversells (a Groupon offer), there is no limit to what we can do," Degani said. "We will honor as many as purchased."

The offer has sparked a "media craze," with the Chicago Tribune running an item and blogs and social media sites picking up on the story, he said.

The rapidly growing, 165-agent firm is "not a discount brokerage, nor do we want to position ourselves as such," Degani said. "This is an opportunity to get people who have been shopping with us online for many years to become clients."

Founded in 1998, Dream Town — like technology-based brokerages ZipRealty and Redfin — operates a Virtual Office Website (VOW), which offers registered users access to more in-depth multiple listing service-based property information than is provided to consumers on IDX (Internet Data Exchange) sites typically employed by brokers.

VOW operators, for example, often provide consumers with access to sold and off-market listing data, which is useful in evaluating market trends.

VOW operators can only provide this expanded listing data to users who register with them by providing contact information such as an e-mail address. Because consumers are willing to provide an e-mail address to access the expanded listing data available on VOW sites, VOW operators can build huge e-mail databases.

"We have hundreds of thousands of subscribers in our database," Degani said.

Dream Town has also attracted an online following because it strives to provide MLS data in a more meaningful way to consumers, Degani said. The company has developed its own proprietary search engine technology, and defined Chicago neighborhoods "in a way that the MLS doesn’t," he said.

The company also provides third-party data to users, and has shot video of Chicago neighborhoods that help house hunters get a feel for the neighborhood.

"We are probably the only real estate company that’s never had an ad in the newspaper," Degani said.

Although Degani said Dream Town has been successful in converting its website users into clients — the company recently opened its fourth office and is now handling more than $300 million in annual sales — Groupon seemed like a good fit for the company.

Degani estimates that two out of three consumers in the Chicago market are using Dream Town’s website, but that many of those users haven’t become clients. A Groupon offer is a concrete call to action for those who think they might be buying or selling a home in the next year.

Buyers have to close on a home purchase and redeem their $1,000 cash gift by April 9, 2012. Sellers must list with Dream Town by that date. The offer is only good on sales of homes priced at $150,000 or more, and is not valid "for past and current Dream Town clients and customers."

There’s been some speculation about whether Groupon’s business model could be a viable marketing tool for real estate brokerage — consultant Pat Kitano recently noted the launch of a collective buying platform for real estate: HouseTipper.

One potential issue identified by Kitano is whether brokers have a big enough subscriber base for a "real estate Groupon." Coupon providers like Groupon must aggregate a large number of small fees to cover centralized operating expenses.

Degani said that Dream Town’s large database of VOW subscribers should guarantee enough interest in the company’s offer. Groupon has its own database of subscribers that attracted Dream Town to make the offer, Degani said.

Email "blasts" to Dream Town and Groupon subscribers are scheduled to go out on Monday, Degani said.

Asked whether Dream Town risks offending existing and past clients by limiting the offer to new customers, Degani said the company has received some calls.

"We hope our clients realize that this is a growth opportunity for us," Degani said. "It’s very similar to paying $100 a month for cable TV service, and the cable company comes out with a special for $19.95 a month for new customers."

Because the company is already handling 400 listings, it could not afford to give away close to $500,000 in commissions to existing clients, he said.

And if Dream Town does not want to be seen as a discount brokerage, does that mean it will not offer rebates again through Groupon?

"I don’t know how this will pan out in the future," Degani said. "I’ll give you a parallel: With department stores, Bloomingdale’s is the place you shop, and then maybe once or twice a year, you can get 60 percent off. People will take notice when a full-service brokerage is offering a discount."

Cambridge, Mass.-based broker-owner Bill Wendel, who has been offering menu-based services to consumers for 16 years, said he is skeptical, as consumers should be able to find discounted services without paying for a Groupon or similar coupon.

"While there may be some bragging rights to being selected as the first-ever Groupon ad for real estate, that doesn’t translate into offering the most value or best savings proposition if competing companies routinely offer rebates on buyer agency commissions or flat fees on MLS listings," Wendel said in an email. "Hopefully, any homebuyer or seller tempted to pay $25 should stop long enough to do some comparative research."

If they do, he said, "they are likely to conclude that it doesn’t make sense to pay to go into anyone’s real estate generation system when competing real estate companies offer greater savings opportunities with no upfront cost."

Degani acknowledged that Dream Town had an advantage in pioneering the first Groupon offer for real estate because he was able to work with the company — which is also based in Chicago — face to face.

But he said he thinks it won’t be long before real estate brokerages in other markets are making their own offers through the site.

"Groupon is a great company, I’m thoroughly impressed with them," He said. "In less than 10 days all the pieces went into place — they are very smart, very sharp people."

There are many ways to craft a Groupon offer, but real estate brokers operating in states that don’t allow rebates won’t be able to employ the same model being pioneered by Dream Town.

According to the U.S. Department of Justice’s "Competition and Real Estate" website, 10 states prohibit brokers from offering rebates to buyers, and eight states require sellers "to buy more services … than they may want, with no option to waive the extra items."

A bill that would have restricted commission rebates in Illinois was introduced in 2008, but was opposed by the Illinois Association of Realtors and was never voted on.

The Department of Housing and Urban Development has ruled that rebates are permissible under the Real Estate Settlement Procedures Act as long as they are reported on the HUD-1 form.

Some states also stipulate that only licensed real estate companies can collect fees from consumers in real estate transactions. Degani he doesn’t believe such rules apply to payments made by consumers to take advantage of Groupon offers, because they are "strictly an advertising vehicle."

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