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February 12, 2007

Hillary: A broker's best friend...

Dean Foust

Came across this item on the Real Town web site that Hillary Clinton is sponsoring a bill that bars commercial banks from hiring real estate brokers/agents. Some were shocked that Hillary would effectively turn on the powerful banking interests in New York City and side with real estate agents, but its probably a shrewd political move: While bank executives might have been appreciative if she supported their efforts to expand into the real estate brokerage business, most are rockrib Republicans and would still be apt to back the Republic nominee. And most bank employees aren't going to reflexively vote for Hillary if she supported banks owning real estate brokerages. In the greater scheme, they probably couldn't care less. But as for real estate agents, this is an important issue and one that might draw Hillary some of their votes -- and their contributions, since agents tend to be particularly aggressive on the political front.

As for the fundamental question of "Should banks be allowed to offer real estate brokerage services," I'd be interested in hearing what real estate agents and brokers actually think. I'm curious whether they actually care who the owner is -- could they make just as much money working for Bank of America as for Coldwell Banker? Could they provide just as good service, or is there indeed a risk that banks might push their agents to close deals at all costs, and then to funnel the buyer to their own in-house mortgage subsidiary? I'd also be interested to hear what consumers think as well...

12:22 PM

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There's a reason why the "company store" is outlawed in many states. Allowing banks to enter the real estate profession would definitely put non-bank employed agents at a disadvantage in the field. If, for instance, a buyer purchasing a home through a Bank of America agent received special financing only available through that particular agent, it could impact non-bank employed agents. It seems like a serious conflict of interest.

Posted by: Marlow Harris at February 12, 2007 09:34 PM

Aren't banks constantly watched and scrutinized??? Hot shot DA's love to stick it to the big guys,ie: spitzer. The big guys give into the pressure the hot shots put on them, even when they aren't doing anything illegal. Who watches, sues and scrutinizes the realtors???? The NAR is such a political machine in itself!

Isn't it time that real estate agents be held accountable? Why should they have the monopoly of the home selling business?? Don't most agents get a little cut when they send a client to a mortgage company, or other realtor??? What about the little kick backs the agents have been receiving for years! How many clients have been pushed into buying a house so the realtor can get the extra $10k the homebuyer dangles in front of the agents?? Isn't that a conflict of interest?? The real estate business has been unethical for years! The buyers of new homes have no choice whether they use an agent or not, to pay the real estate commission. Is that fair that educated professionals can't choose to represent themselves with the builders? No, I could have a Harvard education, yet I have to hire a ditzy, high school educated, former exotic dancer to represent me, so she will in turn share half her profits with me. It's been done. Where's the ethics in that????

I for one say it's time to shake things up a bit. Heck, I'd say the banks will do a better job screening who they hire to sell homes than Coldwell Banker. They'll take any idiot that can pass the realtor test! Don't many real estate firms as well as builders, have their own in house financing. Seems to me if I built a house with Ryland homes and used their financing, I get a few dollars in return. What's the difference?

Posted by: lizziebeth at February 13, 2007 02:08 PM

What kickbacks? In over 20 years of selling houses and real estate I have never received a kickback from any mortgage company. I am putting this in writing; NO! as a matter of fact, your post seems full of accusations that I think are a little way of base. The "little" kickbacks agents have been receiving for years?" The real estate business has been unethical for years? WHAT IS YOUR LINE OF Work, lizziebeth? Would you like me to "dig up the dirt on your profession? I can tell you, and I'm NOT being adverserial here, but in ANY job, you can find the filth, and you can find cleaninless. Buyers can or cannot use an agent, that's their question. The seller elects to use an agent, that's their cost. You get what you pay for. There are many"constants" in the universe. Fight it ALL you want, but it seems one of the constants out there is that for the past 110+ years, the only method of real estate brokerage that has survived and thrived, succeeded and proven itself, is the full service model. Sure, there are exceptions, but all in all, the full service model is the obvious winner. NOTHING would last THAT long if it wasn't working! The Travel industry folded and became very internet based quickly, but from what I've noticed, most of the sales I've had in the couple of years have been from past clients and referrals, not internet leads. Sure, some come in here and there. When they do, I give them the info and THEY MAKE A DECISION! Competition doesn't scare me. The reason? Real Estate itself is a commodity, BUT the service aspect is a consultative approach. Hey, I don't make the rules up, and I can tell you, I am not the type of person to force myself on people. In this day and age, "forcing yourself" on people doesn't work. I also don't send out zillions of mass mailers. All I do is have a blog amd I am available to the folks who want me to service them. AND I TELL THE TRUTH!

I have to honestly laugh at your statement about banks doing a better job screening people than us agents. I happen to be affiliated with Coldwell Banker. I can honestly say I have seen "NEMOVES Mortgage, time and time again, do a much better job than the banks. Why do I say that? I have seen person after person get a better rate, terms and/or conditions than the banks. Oh, by the way, in some of these loans, I did not sell anything, they were refinancing or I simply told them to go to NEMoves Mortgage as a referral. (NO MONEY FOR ME! JUST A FAVOR TO THE MORTGAGE OFFICER, WHO I CONSIDER EXTREMELY HONEST AND KNOWLEDGEABLE!) Why would I give a referral to a mortgage officer for no "kickback"? If you understood business you'd understand. The first reason is I help someone, and provided the job gets done right, I LOOK LIKE A HERO! Which means more Potential business leads in the future! The second reason is the Mortgage Officer may give me a lead in the future! Of course, the only way this works is if both the mortgage officer and myself do a great job for our clients and customers... (NEMoves is a division of the company I am affiliated with.). I think you honestly should get your facts straight before you criticize. I think Banks would love to see the demise of real estate agents. The money to be made with these corporate entities is through financing, not real estate brokerage. The real estate profession has it's own way of weeding out the "idiots" you so point out. 80% of them are out of the business in the first year. Most don't sell anything in that time, and they probably are out over $1,500 between business cards, mailings, MLS and Realtor Fees, etc. I can say, I honestly couldn't say how I could last in this profession for over 20 years if I was "an idiot"... Yes, the profession needs a shakedown, but please remember the banks are not necessarily the way to nirvana. They may be the "hell" you never imagined in your wildest dreams...

Posted by: Jim Gatos at February 16, 2007 08:40 AM

Jim, didn't read your entire message, seemed a bit angry. Things must be tough. My profession is Special Education M.A. Have a Bachelors in Business Administration as well. Not much dirt there. The folks I work with are all pretty ethical. Can't say the same for realtors. This is from the experience of MANY moves. I can't tell you how many times I've read an mls listing that says, $10,000K bonus to the selling agent. Not a kick back???? Whenever I relocate, my local realtor friends beg me to let them refer me to someone. Out of the goodness of their heart you might ask??? No, kick back!!!! How many lunches and seminars with free food, goodies.... have you attended put on by mortgage brokers???? None, then you must not get around much. I've attended these luncheons and seen the goodies that Homebanc give out. So, the way the real estate profession weeds out the idiots is by them not lasting more than a year. How ethical is that. coldwell banker will gladly take their money to pay for business cards, start up costs, classes.... who cares if they are an idiot, they'll be out the door in a year. Of course CB gets to keep their money.

It's time the real estate monopoly is stopped. When one has a painter paint their house, they pay one fee. Doesn't matter if the house is $200k or $800k. If one refinances their home, they pay the same fees regardless if they are financing a million dollars or $200k. Why on earth should realtors get paid more money to sell a $500k house than a $200k house???? I've had houses that range in price from $125k all the way up to $750k. I had the same service on each of my houses by the listing agent. It's completely a rip off! What about the fact that I still have to pay the realtor commission amount on a new house whether I represent myself or use a realtor? How ethical is that. I can't tell you how many people I know who have had a friend or family member realtor take the commission and give it back to the homebuyer. I've actually split the commission a few times myself. Ethical, that educated people can't save money on their new house, who know more than their high school educated(maybe a couple years of community college) realtor????

Did you ever stop to think that having banks with real estate divisions might actually give your profession a much needed status boost. Wouldn't you rather say I work for Bank of America than coldwell banker. People might not think of you as a bottom feeding, used carsalesman.

Posted by: lizziebeth at February 19, 2007 08:22 PM

Sounds like lizzibeth needs happy camp!! Wow!

Posted by: Victor at February 22, 2007 01:17 PM

"LizzieBeth"..

I have a feeling I am going to enjoy this.. LOL..

You keep saying things that are totally off the wall and plain wrong. First of all, let me start by saying I am not angry, if that's how you want to assume me to be, LOL. If anything, this is kind of laughable.

Special Education, eh? Well, I'm not even going to go there. In any profession, including yours, I'm sure the dirt is there. Things must be tough? LOL.. Another assumption. The $10,000 bonus to the selling agent? That I have to agree. I personally don't think that should be an incentive, BUT, if the seller wants to stand out in a crowd of properties, sometimes they, and it's the sellers, not the agents, who do that. I personally wouldn't tell my seller to do that. I would simply reduce the price. What can I say? As for your real estate friends asking you to refer them, really, what's the problem with that? Word of mouth and referrals are the most trusted forms of business today. When you want to buy something, don't you ask; "Who do you know"? If all you are focused on is not having your friend make a referral, some friend you are! It ain't gonna cost you extra, is it? No, I don't go to Broker luncheons, or Mortgage luncheons, but don't insult me, please. I am too busy. However, seriously, if I go to a luncheon, and that is a big "if".. and I happen to spot a house I might think a client of mine may like, where did I cheat you on that? Hmmph?

Coldwell Banker takes the money for business cards? LOL! NO! The business card company gets that money! How much? $40? Isn't that pathetic? The MLS and the Realtor Association get their dues, Not Coldwell Banker. Do you belong to any professional associations? Ever subscribe to any medical journals? Keep up with continuing education? For the sake of your clients, let's hope you do something... There you go again with your accusations... saying things you don't even know about...

I'm not a house painter, are you? Here is another one you said, "If one refinances their home, they pay the same fees regardless if they are financing a million dollars or $200k." Really? Call a mortgage company or bank and ask them what the costs are, and then write back.

If you feel you got ripped off, do it yourself next time please, don't whine..

"What about the fact that I still have to pay the realtor commission amount on a new house whether I represent myself or use a realtor? How ethical is that."

Lizzie, we are going in circles here. If the seller hired an agent, the seller pays what they pay. Please look at For Sale By Owners from now on, Most of them are For Sale By Owner because usually they want to save the commision, or they want some ridiculous amount that NO agent could get..

"I can't tell you how many people I know who have had a friend or family member realtor take the commission and give it back to the homebuyer. I've actually split the commission a few times myself.

Good for you, but my chosen profession is what it is. Perhaps if you take your salary and give it all to the parents of your clients and tell me how you feel AFTER you've done that..maybe you'll understand...

"Ethical, that educated people can't save money on their new house, who know more than their high school educated(maybe a couple years of community college) realtor???? "

That statement shows me you may be harboring some bitterness... This is America. I know a lot of people who didn't finish high school and made MILLIONS! Look at Bill Gates! I don't think he finished college! BTW, I did finish a 4 year college with a degree in Business Admin. Am I worth more in your eyes now?

"Did you ever stop to think that having banks with real estate divisions might actually give your profession a much needed status boost. Wouldn't you rather say I work for Bank of America than coldwell banker. People might not think of you as a bottom feeding, used carsalesman."

That, Lizzie, is totally your sad perception and feeling. I personally feel VERY VERY VERY Proud to say I am affiliated with Coldwell Banker? Used Car Salesmen, eh? I happen to know a couple. Some are very very nice, and personable, and some are jerks.. It's the person, not the occupation. I'm not mad at any of this. I just think you are making too many general assumptions. That's okay, it's a big world out there.

Posted by: Jim Gatos at February 22, 2007 09:44 PM

Jim,

It is what it is. Residential Real estate is a sad profession. Are some good decent people? Sure. I'm glad you are proud of your profession. With the mls available to all, the real estate profession will be overhauled whether you like it or not. The consumers are saying ENOUGH! It has been a monopoly for years and an unfair one to the consumer! Your leader Mr. David LeLiar, has led the NAR to the grave.

By the way, there's a huge difference between Bill Gates building Microsoft and Suzy Exotic Dancer selling millions in a real estate bubble. Now you've made me laugh. Comparing uneducated realtors to Bill Gates! Too funny! By the way, you aren't worth more to me in my eyes because YOU have an education. It's not needed in your profession. You could have a doctorate from Harvard and still be a realwhore. Doubtful that a Harvard grad would sink to that profession though. It's the fact that builders are required by law thanks to the NAR to not discount the real estate commissions to a person not represented by a RW. On the house we are planning to build it's over $30k. Talk about unfair! Of course my friend who is a commercial realtor is representing me, so I'll get most of it back.

Realtors wanting to refer me to out of state realtors is not a referral based on knowledge. It's that little kickback they get from the agency or agent they refer you to. A realtor in Cinncinatti most likely doesn't know the best realtor in Dallas. KICKBACK!!!! One pays the same percentage on mortgages whether the home is $100k vs. $900k. It's not 5% for the $100k home and 6% for the $900k home. Last time I checked it's my near perfect credit that got me the best rate, not the cost of the home.

Not sure what you meant, but when you said things must be tough regarding my profession. Well, things aren't tough which is why I am able to work in this field. Hey do the math on the commissions of our new home. We only carry a $300k loan. No jumbo loans, exotic financing for us.

No, you aren't a painter but like a painter you provide a service. Real estate should be flat rate fees and or elevated marginally. Can you honestly say you work harder selling a $600k home than a $300k home????? If you can, I feel sorry for your clients that are selling the less expensive properties!

Posted by: lizziebeth at February 25, 2007 09:59 AM

Well, it's evident you have a lot of animosity...

I of course, disagree, with the "overhaul" of my profession. I was holding back in showing you how some folks out there could percieve your profession as "voodoo" science.. All I have to say is there are people out there saying ENOUGH! to Prozac, Valium, and all the percievably wasted time "counselors" spend on patients. Truth is, some of those counselors don't do the world any good at all. Want to argue? What good did you folks do this this kid? All the drugs and counseling didn't help him out...

http://www.thetrenchcoat.com/archives/1740-Lincoln-Sudbury-suspect-bragged-of-knives.html

So, what do you want the public to think of your profession when we read THAT stuff?

SOME consumers are saying enough... There have always been "some".. Always will be.. It's not the end of my profession. Is it the end of yours?

Of course, I don't enjoy you calling me a "realwhore". I tried to not get personal. I can very honestly say My clients think I am valuable. If not so, why do I keep getting repeat and referral business? Year after year after year?

My education is a plus, but I don't consider college education THE PRIME reason why some people succeed. I suspect you're probably upset because you may not be making a decent living. I don't know, but with the animosity you have, what am I expected to suspect?

The funny thing is that yes, there are a lot of grads from universities that migrated to the real estate profession. Don't know if they are from Harvard, though. Some have succeeded, some have failed. I know a girl who has a special education degree from Boston University and she was a straight A student. Her pay? Under $40,000.. Do I think she's not good. I don't, but she does..... She's presently looking for another job... Do I criticize? Nope...

I just referred someone to Florida. They called me and told me THEY wanted me to refer them, only because they knew they couldn't bring me with them to househunt down there. So, I went through the referral network. Lizzie, you sincerely don't know what you are talking about. All you are doing is talking from anger and hatred. I spend 7 hours between relo and talking to other agents in Florida. Guess what? It ain't even a Coldwell Banker office that is going to get the referral! So, excuse me, lizzie, NOW I TAKE Offense to your hostility. I made sure I could try to find someone who I could speak to on an onging basis and monitor the situation from where I am. If you don't know Realtors like that, or you don't want that, that's YOUR problem, not mine. My clients call me. I don't force anything down anyone's throats. If you don't have any business relationships with Realtors like that, that's your decision. It may be a kickback, but I honestly don't see what your problem is. It's my profession and I am open and honest about it. Don't however, tell me I don't provide a service. That is nothing YOU know about, and you know it...

I should develop a committee and come up with a totally new payment plan for what you do. If you were to get paid on 100% success, what do you think you would have for "take home pay".. You can sit there and tell me and all the Realtor's what ours are... We don't get paid unless we succeed. Sure, sometimes we screw up. Sometimes we fail. We're human... in spite of what you may think of us...

Posted by: Jim Gatos at March 1, 2007 12:46 PM

Lizzie, Here are some links I thought you may want to see.. When One Wants to Find "Dirt", one can...

http://rsaffran.tripod.com/Brookline.html

http://psychologytoday.com/articles/pto-20001101-000031.html

http://www.nospank.net/n-m82r.htm

http://www.psychiatric-abuse.org.uk/

Lizzie, I could go on and on.. but I am intelligent enough to know there are two sides to every issue... For every BAD one there are usually 100 good ones, in any profession.. and I honestly think everywhere there is improvement BUT.. You don't work day in and day out in real estate. I could go on and on.. but I will try not to, because I don't work in your field...

Jim

Posted by: Jim Gatos at March 1, 2007 01:26 PM

Hey Jim,

Your links really mean nothing to me. I work with kids with severe disabilities. None are drugged except those with seizure disorders and quite frankly they are better off with it. One kid dove into a pool head first. He is being rehabilitated. No dirt there, but hey, if teaching a kid with Downs Syndrome life skills has dirt, then go for it.

On another note, I just had to check out your website. I had to laugh. If your business isn't being overhauled, then why do you spend so much time discussing why your clients shouldn't use a discounted broker. Ha!

Posted by: lizziebeth at March 1, 2007 10:51 PM

Lizzie, your answers are getting shorter and shorter.. I suspect you're running out of steam..

I put that information on to inform people of the other side of the coin.. There are unknowledgable screwballs like you around, know what I mean? If they don't want to work with me, fine..I don't want them around too. At least they know where I stand..Won't waste anyone's time...

Good luck in your profession.. no matter what you say, you know I got my point accross. We all can't have as "noble and honorable" an occupation..

HA? That is almost as childish as "LizzieBeth".. Are you sure you're not some 14 year old?

Posted by: Jim Gatos at March 2, 2007 05:48 PM

It sounds like Lizzie is a bit delayed herself. It's only the truly uneducated that could be that judgemental of another person, and hold that much anger and resentment. I'm also wondering; if Lizzie had such a bad experience with a Realtor on the first go around, why does she keep using the services?

Posted by: Kathleen at March 5, 2007 11:01 AM

Yes kathleen, I do harbor some anger and resentment towards the real estate profession. When I moved back home to my wonderful state of Florida I couldn't believe my eyes and ears! Realtors and sales people pushing the "They aren't making anymore land you know", "you'd better buy now before you're priced out forever", "Real estate only goes up"..... Ironically prices have fallen 20% since then! Houses are sitting. Now the realtor plea is"just make an offer". It's a joke! The number of people who went into real estate was astounding. The number of realtors who bought numerous homes to flip, based on their leader David LeLiar claiming real estate always goes up.... They have made a mess of this state! It was a joke how many bartenders and waitresses went into real estate and were splashed across papers claiming to be self made millionaires causing more folks to join the "get rich quick on real estate" game. Of course they were in the red every month, but their real estate acquisitions made them paper millionaires. Real Estate is a mess and we owe it all to the NAR!

I have had some good experiences with realtors. I didn't mind paying 6% when I was buying a $150k home. I mind when I'm buying a $950k home! Well, I will surely let my alma mater "Go Gators" know that they let a truly undeducated student graduate with honors. I'll let my graduate school know as well:)

Jim, from reading your website and seeing your listings, oops, I mean listing, I think I'm your DREAM client. By the way, I'm actually a very nice person, and I wouldn't trash your profession to your face:)

Oh, and I'm a 41 year old former marketing executive, turned teacher, married with children. You just had the numbers reversed.

Posted by: lizziebeth at March 5, 2007 06:00 PM

Lizzie, "You poor deluded child, can't you see the folly of your ways?!..."

That was a statement "Batman" made to one of The Joker's Dumb & Stupid girls, or "molls".. in the 1966 Batman TV Series.. LOL.

People sometimes have "selective" hearing, and selective memory. All in all, real estate goes up, and it goes down.. IN THE LONG TERM, historically speaking, real estate always go up. In the short term, of course you may make a killing, or you could lose your shirt. Again, folks like you are generalizing...

I can assure you you would NOT be my dream client, and I wouldn't want to be your "Dream Agent".. I beleive in poetic justice. I went to a listing appointment lately. I told the seller, blah blah blah, and this is what I charge, in my case, was 6%. THAT IS MY PERSONAL POLICY. They wanted to knock it down. I said, "Thank you, I'm out of here.".. They were stunned. They list with a discount agent. 4 months later they sell for $50,000 LESS than what I could've sold it for. Poetic Justice. My 2^% is less than their $50,000.

I KNOW I could've sold it for $500,000.

Another case. Not commision based. I walk into a house. I tell the owner "$239,900". They get mad. They list with a "discount broker for $299,900. 5 Months later and the market time reflecting that now, (which hurts the seller because if anyone else lists it, the market time doesn't go away), they cancel the listing. They are in danger of foreclosing. I don't even bother with the argument. Why should I expend needless energy and expenses for nothing?

If it's not my way, most likely I'll simply walk out.

Lizzie, don't keep "assuming". That "listing" you like joking about is on deposit. As a matter of fact, I have over $850,000 pending now. I am in the middle of changing my website. It should be up in a week or so. (www.jimgatos.com) .. I ahve a steady clientele that I service, including a builder I have been servicing since 2000, and so forth. Lizzie, you really don't know what you're talking about when you "think" you can figure me out. You definately wouldn't agree with me if you could read my mind and "see" what I may think of you. You see, I don't know your last name, you know mine. I can assure you, and I'm downplaying this, I'm a pretty busy and profitable guy.

If we were to meet, I wouldn't trash you in your face. I'd just avoid you. 80% of the people out there are really really nice people. (That's something I learned lately) It's not hard to find them. I'm sure you are speaking from an emotional state, the problem is when I hear generalizations from folks like you, if I let it go, I am in fact agreeing with it. Read this post from Greg Swann, and you'll see what I mean.

http://www.bloodhoundrealty.com/BloodhoundBlog/?p=1132

Posted by: Jim Gatos at March 11, 2007 12:13 PM


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