What is Clever Real Estate? Read This First.

Posted on Sep 21, 2021

Clever Real Estate is a national brokerage that pairs agents with consumers looking to buy or sell a home. Unlike other brokerages, Clever is an entirely online service (listwithclever.com). Rather than having agents pay for leads, agents pay Clever a referral fee (a portion of the home’s selling price) when their agents successfully help clients buy or sell a home. 

Clever Real Estate offers full-service listings for $3,000, or 1% if the home sells for over $350,000. Clever doesn’t alter the buyer agent’s commissions, so that agent typically receives the standard 3%. For home buyers, Clever offers .5% of the sale price cash back at closing. 

Are Clever agents trustworthy?

In many ways, Clever Real Estate is like a matchmaking service of real estate agents. They find someone they think can help you buy or sell your house, then connect you to each other. These agents are traditional agents who already work for other brokerages like Coldwell-Banker or RE/MAX. For the most part, though, what happens after that is between you and the agent/their brokerage - Clever won’t be involved.

Clever relies on a referral network of agents. Here’s what they look for in agents:

  • Professional, full-time agents
  • Positive reviews from past clients
  • Experienced negotiators
  • Local market know-how
  • Tech-savvy agents 

So what’s the downside to working with a Clever agent?

One of the main issues with a traditional commission setup (which Clever ultimately relies on, just with a different commission split) is that agents are motivated by commissions first, rather than client satisfaction. Why? If they don’t close your deal quickly, they don’t get paid - period.

  • From the buy side, agents working on a 100% commission structure are incentivized to get their clients into a home as quickly as possible so they can move to the next client. They also make more money on the home sale if they show clients homes at the top of their budget range (or maybe even a little beyond it). 
  • From the sell side, agents working on a 100% commission structure are incentivized to sell the home as quickly as possible so they can move to the next client. They are also more likely to recommend renovations, even though data shows that most people lose more money on renovations than they make in the sale. The agent, though, wins because they don’t have to pay for the renovations - but they still benefit when the home sells for more.

By comparison, brokerages like Houwzer are moving away from the traditional commission structure. Houwzer agents are paid a full salary with benefits. This means that clients can take a year to look at homes if that’s how long they need, and agents aren’t incentivized to push them into the most expensive homes they can afford. And because Houwzer’s agents are employees, rather than contractors like traditional agents, agents receive extensive training, support, and are backed by a logistics coordinator and full-support team. 

Houwzer also prioritizes expertise - all their agents specialize in one side of the transaction, not both. Why? Buying and selling are two different, complex processes - and local real estate markets can shift in a matter of months. 

In a traditional brokerage, a home buyer might get paired with an agent who’s listed 10 homes in the last year, but only bought two. Consequently, though they may come highly recommended, their knowledge of the current market isn’t all that up-to-date from the buy side - they're mostly a listing agent. It’s also easier to make mistakes or forget things when you haven’t handled one side of the transaction for half a year.

Is Clever Real Estate legit?

Clever Real Estate is a legitimate real estate brokerage. Clever essentially serves as a referral company, connecting home buyers and sellers to agents in their area. Participating listing agents have to agree to Clever’s commission terms (1% listing fee for properties over $350,000). 

There are hundreds of reviews for Clever online - mostly positive and some negative - indicating that this is not a fly-by-night company offering one thing and giving consumers another. Although they operate out of St. Louis, Missouri, their services are offered nationwide through their online platform listwithclever.com

As HomeOpenly points out in their review of List With Clever, “Clever Real Estate operates as a licensed real estate brokerage… but it does not produce any services that are typically offered by real estate agents, and does not represent consumers when buying or selling real estate in any State. Clever Real Estate operates with a sole purpose to collect referral fees.”

This is worth emphasizing because many people believe Clever Real Estate to be a brokerage similar to Coldwell Banker or Houwzer, but in reality, it operates more as a referral fee network. Clever isn’t training agents or creating technologies for them to use; it’s simply connecting clients to agents at existing brokerages that do the heavy lifting of marketing the homes and overseeing the transaction.

Clever real estate reviews

On the Better Business Bureau (BBB) website, List With Clever has a customer review rating of 3.4 out of 5 stars based on 5 reviews. The BBB is a nonprofit organization that helps consumers find businesses they can trust.

On Trustpilot, a popular consumer review site, Clever Real Estate has a rating of 4.9 out of 5 stars based on 1,157 reviews. Here are some of the reviews you can find there:

  • "The process was very straightforward. I was matched with an agent within just a few hours and had the home on the market quickly. My agent answered all my questions and represented my interests well with the buyers’ agent." -User JMT
  • "You get what you pay for. Our Realtor used his phone camera to take pictures. He did the same for the video and never attached it to the site. He put it on YouTube. We thought all our new renovations would sell the place when people saw it. We lost 4 months in the hottest market." -User Deanie Benedetto
  • "We had a really good experience with Clever. They got us in touch with a knowledgeable real estate agent who helped us get our house listed and sold quickly. Would definitely recommend." -Issa Lee-Hall
  • "The 1% fixed agent fee was great. However, that's it. Clever didn't put much guardrails around agent and the collaboration was a bit 'wild' and I had to direct the sell to a direction that was going to work." -User Lex

It’s worth noting that List With Clever was responsive to both positive and negative reviews, indicating that they are not ignoring the issues any clients have with their services. 

For example, in response to a negative review where the agent requested money beyond the 1% Clever promised, Clever co-founder Luke Babich replied: ”Clever is constantly investing in our Agent Network… As we make those investments, fewer and fewer customers will have a negative experience where a newer agent doesn't get the program.”

Does List With Clever save you money?

If this is your first time buying a home, keep in mind that it’s usually the seller who pays the commission fees for both agents as part of their closing costs. However, Clever does offer home buyers .5% of the sale price cash back at closing (so for a $600,000 home, you'd receive $3,000).

When it comes to sellers, it really depends. 

  • According to Clever’s website, “we save homeowners an average of $9,600 in commission fees.”
  • By comparison, Houwzer’s website says, “On average, we save people $12,000 from eliminating outdated commissions.”

Ultimately it may depend on how expensive your home is and whether it makes sense to go with a $5,000 flat fee (Houwzer) or a 1% commission model (Clever Real Estate). 

You also need to consider that Houwzer recommends 2.5% commission for the buyer's agent, but Clever doesn’t set a number. If the standard 3% is used, then some of the money sellers save on the sell side with Clever then has to be used on the buy side.

For a $600,000 home:

  • A seller working with Houwzer would pay: $5,000 (flat fee) + $15,000 (2.5% for the buyer's agent) = $20,000
  • A seller working with Clever would pay: $6,000 (1%) + $18,000 (standard 3% commission for the buyer's agent) = $24,000
  • A seller working with a traditional brokerage would pay: $18,000 (3%) +18,000 (3%) = $36,000

Clever is going to be more affordable than a traditional brokerage, but against modern brokerages like Houwzer they can be more expensive - depending on the home price. Because Houwzer sets a flat fee for listing services, though, Clever Real Estate can be a better proposition for homes that sell for much less.

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