AmeriNet Financial Services, which two years ago figured prominently in the national debate over affinity group discounts in real estate deals, has now become HomeSpace Inc., a privately held company that helps consumers leverage their bulk buying power into price reductions on everything from real estate commissions to moving costs.

At the core of the HomeSpace business plan is consumer cash rebates for using real estate brokers and agents who are members of its real estate network.

"Customers can receive a rebate of up to 1 percent of the value of a home whether buying or selling," promises Henry DeNero, the new CEO of the company headquartered in Englewood, Colo.

HomeSpace also offers discounts on moving through its relationship with MoveSource, home warranties via American Home Shield, home inspections through HouseMaster, home security through Protection One and other price reductions from other vendors.

"Our service is designed to demystify the complicated process of buying, selling, and managing a home," said DeNero. We help our customers get the service they paid for."

AmeriNet was formed in the early ’90s -- before the Internet came into vogue -- primarily as a loan-by-phone mortgage broker. Consumers nationwide could contact the system’s call center in Colorado where experts would search an electronic database to come up with the best mortgage package.

In 1996 and 1997, however, AmeriNet joined Cendant and other companies as a focus of real estate regulator concern when they began offering special groups cash rebates on their real estate commissions.

In early 1997 the nationwide chain of Costco discount clubs forged a deal with AmeriNet by which Costco members using AmeriNet-approved agents could get cash back. At the time -- and even now -- most states prohibited the payment of rebates to non-licensees, although several states except consumers either by tradition or by statute.

Industry worries focused on whether such affinity programs would ultimately have the affect of ratcheting down commissions across the board as non-network brokers attempted to compete with the commission-cutting brokers.

Currently 15 to 20 states -- including Mississippi, Alabama, Iowa, Oklahoma and Alaska -- either have laws or are considering laws to specifically forbid real estate agents from sharing commissions with other agents if they know those other agents will be giving a portion of their money back to the consumer.

Although compromises have been reached in many states, such as Oregon, the practice remains controversial.

Agents who work with the affinity groups argue they more than make up on volume what they lose in cutting their commissions.

Other professionals, however, complain they could be forced into a price wage.

Real estate regulators maintain non-licensed person should not get part of the commission because regulators only have disciplinary control over licensees.)

Currently AmeriNet/HomeSpace has rolled its Costco deal out in seven states where is it known to be legal. Officials hope to win over other states in the near term.

Published: September 9, 1999

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