What if mortgage companies decided to open their own real estate firms...

Hasn't this kinda happened with GMAC?

no.. not really. that's more of a franchise.

i'm thinking smaller mortgage companies and mortgage banks developing their own firms, and rather than them relying on agents for business they capture the mortgages and brokerage business.

pretty sure there is a law against that... Credit Unions however fall under different guidelines

Nope. Perfectly legal. Not talking banks but mortgage companies. Banks will probably get in someday... there is no reason for them not to except the NAR lobby.

There is a bank in SD or ND that offers to sell customers homes for them for a flat fee... not sure how they do it but I saw it online awhile back.

There has been a lot of controversy over banks getting into the real estate business over the past decade. Presently the law forbids banks doing real estate. However, Broker originally posted if mortgage companies were to get into real estate. I am not aware if mortgage brokerage companies are exempt. Maybe someone can shed some light.

It would seem to me the banks have been kept out of the real estate business due to the fact that law makers look at the banks doing financial activity and real estate companies doing commercial activity and in the public's best interest "never the twain should meet".

One of the biggest real estate franchises in the tidewater area of Virginia is owned by Towne Banks and they just bought a real estate company here on the Outer Banks of NC. So, banks are allowed to sell real estate.

What NAR has been fighting is the banks request to sell real estate without having to follow any of the state or federal real estate laws. They want to be able to sell real estate under their own rules.

Big difference.

We have mortgage and real estate and title companies all under the same company here in Minnesota. They do ok, but I think people are going away from the "Good ol' boys club" mentality.

Here is some history and check the FAQ's for Credit Unions etc.

http://www.realtor.org/banks_and_commerce.nsf/pages/banks_in_real_estate

Thinking out loud...

Will there be more agents in 5 years or less? On one side you have a likely decrease in home sales because of rising interest rates (fewer agents) ... and on the other you have a deteriorating economy which sends people into low barrier to entry professions like real estate (more agents). Which will it be...

Broker, you just hijacked your own post, lol Maybe there should be a "Thinking Out Loud" category

Yeah... random thoughts... thinking out loud. Here's another one:

Is it o.k. for websites to take public data on agents, put them in a directory, then import their listings from another public site without an agents permission? Then say "claim this directory listing". They may think they are doing an agent a favor for promoting them and their listings... but are they?

Once stuff goes online is it open for grabs? What if you don't like their site or they are using your info for their gain? Should there be a "do not advertise" list?

I just wish that if they pulled information that they kept my ads legal. We have strict advertising rules and some of these sites just pick and choose information. One has me listed as being with a brokerage that I worked for a year ago. I saw one classified site that pulled a Kijiji ad of mine but deleted half of the ad....the stuff written in my ad is there for a reason!! We have the problem with some sites showing prices in foreign currency to ours. I don't mind info being used so long as it is used properly.

Don't just worry about mortgage companies jumping on the bandwagon.

The two major newspapers in Salt Lake City operating as Media One started a real estate brokerage to help offset falling incomes.

They charge $2,000 to list, no upfront fees, and advertise the heck out of their listings. If I advertised my listings that much I would be losing money, so I suspect a potential Respa violation.

Anyway if it proves successful I thing you may see the newspapers in your area try it.

What would the RESPA violation be?

I know of a company that has received about 2MM in funding that is working with some media companies so that when a consumer searches for property via a link to their real estate section, the persons info is captured and then sold as a referral. There is also a company started by some ex-NAR big wigs that helps media companies generate income from broker ads beyond the ad fees paid.

There are a number of multi-billion dollar companies that currently serve the real estate sector that have designs on capturing brokerage marketshare once the cost/benefit pendulum swings to the side that it will become more profitable to circumvent agents than to sell/service them. Sounds like the newspaper that you mentioned reached that point where they felt that the loss of broker ads could be less in the long run vs potential income earned from their 2k plan. It will happen more and more around the country.

The barrier to entry into this business is very low and some people take full advantage of that fact.

there will always be room for rainmakers. Regardless of someone doing something cheaper. Lets face it. The public can use a discount broker if they choose, but the discount broker does not attract the agents who have serious closing ability due to the lack of potential pay. The way that society works is this. The public will use the best thing for themself. If something better comes along that will be the new standard. We have wheels on our cars because there is nothing better to put on the four corners of the car. If there were, we would not have wheels. Agents are wheels

Some of the most successful agents in my area work for discount/flat fee brokers. They close just fine and are more geared toward buyers than listings. It's a business model choice which is partly effected by location/competition.

And you're absolutly right - things operate the way they do because something better has yet to come along. The consumer will determine what is better... not the agent. Once they get more educated on the process they will be in a position to better understand the costs involved and the cost/benefit of various offers. Right now... in many area of the country... things still operate the old fashion way.

From a big-picture perspective it is far easier to convince a consumer that they can pay less for services than more... regardless of how skilled a salesman think they may be. Put a media company or mortgage company behind that and change is coming. Better buy a few cans of fix-a-flat to have on hand.

Broker

I suspect the respa violation may be the cost of advertising that the newspaper gives to the brokerage, if any. If I ran the same ads, etc. I would use that $2000 up rather quickly. So I suspect no level playing field by the newspaper. They are two separate entities and I believe not exempt because of common ownership.

But I would treat them the same as any other discounter and make sure my client gets any supposed savings.

commissions are negotiated, jsut like everything else.....92% of the listings on my mls are at a 2.5% co-op. I make an assumption that the listings are 5% since most brokers split 50/50. i know a few dont, but the co-op is the only thing that i can use to make an educated guess on total commission. due to my skill as a salesman my fee is higher than the other 92%. I bring more value and people see that. lucky wrote a quote on his thread...i liked it....something about average is the best of the worst and the worst of the best...lets face it, the majority of a true competitors competition is average!

gearing a business more towards buyers limits what can be done.....no one can argue that it takes more time to work a buyer side of a transaction than a seller side. if anyone does want to argue that, please, let me hear your side.

I see that you highlighted a certain section in red. Do you really beleive that if a major media company came in and offered to sell houses in your market for $2,500, advertising the heck out of them, (say a 150k house) that consumers would view you as having more skill and pay you $8,000 or so for the same job?

Yeah I know of a lot of no name mortgage brokers that are realtors as well

Of course then again..what is a name broker?:)

When looking at the trends of if there will be more or less agents in 5 years I am going to say less. I say this because of not only the current economic situation but for the fact that many people got into real estate in the past few years don't really understand the market. In the 90's and 00's it seemed like anyone could be a Realtor as long as you had a little capital to get yourself started. But what everyone didn't want to realize is that housing prices could not continue to go up forever. That is why many "Realtors" and banks got stuck with their hands in the cookie jar. When you keep taking on risk but not realizing the severity of it, it is only a matter of time before the walls come tumbling down. Therefore the growing trend of anyone can be a real estate agent I feel is starting to decline.

Myles Weisman


www.homesforsaleinsandiego.com

I see that you highlighted a certain section in red. Do you really beleive that if a major flat fee listing company came in and offered to sell houses in your market for $500 or less, advertising the heck out of them, (say a 150k house) that consumers would view you as having more skill and pay you $8,000 or so for the same job?


I reworded your post. this is already reality and they pick me time and time again. no worries here. some can sell and some can't

imagine if real estate sales agents had to apply for the job and were hired based on their sales ability? how many agents would we have? this is a sales position. some don't like to think that it is, but this is a sales business.