PrintPrintOne local real estate company’s ad campaign — encouraging homebuyers to “break up” with their agents — has stirred up so much controversy that the broker in charge is canceling it.
By Molly Parker
mparker@scbiznews.com
Published Feb. 16, 2009
One local real estate company’s ad campaign — encouraging homebuyers to “break up” with their agents — has stirred up so much controversy that the broker in charge is canceling it.
Steve deGuzman, owner of the Rehava Real Estate Store that opened last summer in North Charleston, says he has done nothing wrong. Still, deGuzman said he will halt the campaign out of “professional courtesy.”
Some billboards have already come down, and deGuzman said the advertisements posted on the stall doors of dozens of public restrooms will disappear soon. He also plans to take down the campaign’s accompanying Web site, www.breakupwithyouragent.com.
Several real estate agents have alleged that deGuzman’s campaign violates articles of the National Association of Realtors code of ethics. Mainly, they say deGuzman’s ads flout an industry standard that says a Realtor shall not attempt to interfere with another Realtor’s clients. The opening line on deGuzman’s Web site asks viewers: “Is it time to break up with your agent?” The entire ad campaign is based on this premise.
It follows with a list of other questions, such as: “Is your current agent giving you half of their commission when you buy a home?” “Do you feel trapped in a real estate relationship?” and “Is it time to move on?”
An official grievance against deGuzman has been filed with the Charleston Trident Association of Realtors. If it is found that deGuzman violated the code, the infraction could merit simply a requirement that he take an ethics refresher; or it could result in a yanking of his Realtor title — a rare sentence for first-time offenders.
Grievances filed against Realtors are not generally made public. DeGuzman forwarded the complaint to the Charleston Regional Business Journal.
DeGuzman said he’s being targeted because other agents are intimidated by his business model.
“You wouldn’t believe how much grief I’ve received over this,” he said.
The six real estate agents he employs are paid a $30,000 salary, and they do not work on commission, as is the industry norm. DeGuzman courts clients with the promise that half of the commission his company earns at the closing table will be rebated to the buyer.
The ad campaign was created with the help of Hook USA, a Charleston-based marketing firm. The idea started with a poll that asked people what would prevent them from doing business with Rehava. The overwhelming answer, deGuzman said, was that people choose a Realtor based on personal relationships, such as choosing a sister or a friend.
“It was a clever kind of thing. We created a questionnaire we thought was funny. Then we rolled out the dollar bill billboards. The response was overwhelming,” deGuzman said.
The billboards deGuzman referenced went up at the beginning of January. For a week, the billboard featured a picture of a dollar bill. The next week, the billboards were replaced with a picture of a dollar bill ripped in half. Another week later, the billboards were replaced again, this time outlining Rehava’s offer of half the Realtor’s commission.
By summer, deGuzman said Rehava will have spent $250,000 on the marketing blitz. DeGuzman said the money is coming from an angel investor in Pasadena, Calif., who has asked that his name not be revealed.
Before opening Rehava, deGuzman worked for several years for Sandlapper Real Estate Group in Charleston. But deGuzman said it was during his time as a franchisee with Hooters that he learned how to effectively brand a business. For years, he ran several Hooters restaurants in Philadelphia and other Northeastern cities.
DeGuzman thinks his real estate concept is so cutting-edge that Rehava will eventually become a national franchise.
But so far, business has been relatively slow. The company participated in 13 closings in 2008.
And deGuzman’s detractors say they are not intimidated, just committed to the ethics of the industry.
“He’s deliberately soliciting the relationship the person already has with a Realtor,” said David Wertan, broker in charge at Re/Max Advanced Realty. “I think they know it’s unethical to do what they’re doing. I think they just think they can get away with it. I think that’s the thing the Realtors are so upset about, is he’s not only doing it, but doing it very blatantly.”
Wertan is not the broker who filed the complaint against deGuzman.
Gettys Glaze, president of the Charleston Trident Association of Realtors’ multiple listing service, said it’s important that people follow the ethics guidelines. But as to deGuzman’s business model, Glaze said people are free to experiment with whatever ideas they have.
“That’s the beauty of capitalism,” Glaze said. “The market will dictate what happens. That’s free trade. The consumer is going to say what value the real estate agent brings to the table.”
Reach Molly Parker at 843-849-3144.
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