Cut-Rate Brokers Getting Cut Out

AMC Realty Network, a discount real estate brokerage launched earlier this year in Newport Beach, has had a hard time finding a medium for its message. The company collects a $2,500 fee to represent buyers when negotiating the price of a new home, which is cheaper than a full-service brokers who generally split a 6% commission between the buyer’s and seller’s agents.

So far, the company has handled about 24 transactions, founder Charles Alvord said. He contends the number could be much higher if he could display his commissions in free magazines that advertise new home listings in news racks and in supermarkets throughout Orange County.

But those publications, which depend on revenue generated from large-scale brokers, generally have declined to accept the company’s ads. One magazine accepted Alvord’s ad earlier this year, but received so many complaints that it canceled future ones, Alvord said. Representatives from the magazines did not return phone calls.

“It appears that some full-commission brokers don’t like what we are doing so they have been threatening . . . to pull their advertising,” said Alvord, who lists his business in the OC Metro publication.

Other brokerages that offer discounts have had similar experiences. Larry Friedman, president of HomePro Realty, a major realty firm in Orange County, said he advertises in the monthly publications, but isn’t allowed to mention his cheaper rates.