Discount Broker ZipRealty Sued By California

ZipRealty Is a discount brokerageAs reported in numerous news sources, California’s labor commissioner, Julie Su, recently sued discount real estate broker ZipRealty Inc. for $17 million over unpaid minimum wages. The state says that ZipRealty broke the law by not paying its agent’s minimum wages or overtime. Zip relies on employee agents to respond to peoples online customer service inquires.

I can’t imagine why any buyer or seller would want to hire a real estate agent only qualified to make minimum wage. This gets worse. Zip and several other discount brokers are apparently loosing money hand over foot. Zip has made Zip in profits since day one. In fact, Zip has lost $115.8 Million to date.

It looks like excellent customer service is still thriving in real estate! It could be however that some buyers don’t know that it usually costs nothing to use an experienced real estate professional as the seller pays most service fees?

For home sellers, the difference between a discount agent that charges 5% and a full service agent at 6% is 1%. Would a seller come out ahead if their acutal selling price were reduced by just 2% because the seller chose to work with a discount agent making minimum wage?

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