REALTORS Score Victory in Senate Appropriations Committee
Jim Messenger — 07/13/07
WASHINGTON –The United States Senate Committee on Appropriations adopted an amendment to the FY2008 Financial Services and General Government Appropriations Bill that permanently prohibits national bank conglomerates from engaging in real estate brokerage and property management.
“Today’s action in the Senate was a great team effort,” said NAR Senior Vice-President of Government Affairs Jerry Giovaniello. “REALTORS across the country, state and local association staff and our NAR staff in Washington, DC joined forces to achieve this victory.”
Filed in Real Estate News with 19 comments
Thats pretty good news.
July 16th, 2007 at 11:59 amThat is great news. Banks have no business selling homes anyways.
This is what could have been:
July 19th, 2007 at 9:31 amHey Mr Customer come on in, we can give you a loan, sell you an investment property, and then manage it for you…and naturally we are giving you the best prices out there (even though there is no competition).
That is excellent news. Having a one stop shop for housing needs would create a serious problem for consumers as demostrated in Ken’s example.
July 19th, 2007 at 11:15 amToby I don’t think that most people can understand why it would have been so bad. But really all you have to do is look at the profit reports of banks and realize the they don’t care about consumers, just how much money they can make off of them.
They could have crushed the current real estate model by offering really low prices on all services. These loss leader prices would have only lasted as long as it took to remove the competition from the market. After that the cost of buying or selling a home would have gone through the roof.
July 19th, 2007 at 12:35 pmComing out the corporate world - the one thing that drives a company that is publicly held is the bottom line and the dividends being paid out. One stop shopping for real estate - a bunch of manure.
July 22nd, 2007 at 4:43 amDoesn’t convenience cost the consumer?
I was a financial controller for a public company before real estate so I know how much the bottom line can effect things. We would put of hiring people we desperately need to keep the bottom line looking good, increased prices one items that we already had huge profit margins on because nobody else had the product, and just about anything else to increase our profits. This was a private company that went public and everything changed.
July 23rd, 2007 at 9:17 amJust imagine for a few minutes how it would affect the search landscape if banks were allowed to become real estate brokerages.
Could you afford to match their budget for Search Engine Optimization?
July 23rd, 2007 at 11:19 amBudget is one thing that keeps me driving for a more efficient optimization. Being an independent sometimes the resources aren’t there like I would like them to be. It would be bad across the board if huge companies threw millions at their seo and crushed us little folk.
July 23rd, 2007 at 12:37 pmI was doing something about this thread today and something caught my. Jim mentioned that budgets would be difficult to compete with in SEO and Ken pointed out how bank could squeeze by offer full service at a discount. But after scanning some search results tonight it dawned on me that is what Yahoo does, http://realestate.yahoo.com/Washington/Lynnwood.
July 23rd, 2007 at 7:36 pmJim - with real estate franchises they do not seem to do enough optimization down to the local level - they leave up to the brokerage or agent. But with the banks deep pockets they would really change the whole real estate landscape and not just in the area of search.
July 24th, 2007 at 9:23 amWell when everyone else is looking at the big bad monster (AKA Banks), noone bothers to check the monster next door. your friendly giant Mortgage brokers. Most discount brokers die out after a while due to low profit margins but when a mortgage broker next door opens an extreme discount real estate brokerage for his own mortgage sale, well, it does the same damage but realtors dont even bother looking at that angle.
July 25th, 2007 at 11:37 amMert there is one huge difference, Mortgage brokers don’t have billions in revenue to offset using the real estate brokerage as a loss leader. Many that have tried to open up real estate offices and tie them to their mortgage office have failed. A few will do ok with it, but none will ever compare to what Chase (just and example) could have done as a bank.
July 26th, 2007 at 6:51 amIt is also comes down to customer service and the power to sway consumers to use additional products. Banks, in my experience, have a higher customer service approach then discount mortgage brokers and as such would have an easier time convincing clients to use their real estate branch while looking for a home loan.
July 26th, 2007 at 11:08 amSure, thats great news. Now if real estate agents will get out of the mortgage origination business as well, then I will be really happy. Let’s keep the banks out of the real estate business, and lets keep the REALTORS out of the banking and morgage origination business too.
Every time a real estate agent submits a bid on one of my listings along with a “pre-approval” letter for a loan he intends to originate, I cringe. Most real estate agents do not have the same skill-sets that mortgage originators do. Most of us would do better to “do just one thing and do it well” than to try to wring every last dime out of every transaction.
July 26th, 2007 at 12:34 pmToby - it seems to me the bigger the bank the less customer service they deliver. There have been some banks that their customer service has been lacking.
Banks have thought about charging customers for each transaction thru an ATM.
You might be too young to remember the “old” days when a kid could bring in his/her pennies and save the bank use their coin counting machine and eventually deposit those pennies into a saving account. How often does a bank do that now and especially open a saving account for a kid to create the habit of savings?
July 30th, 2007 at 5:57 amKermit - I am one of those real estate brokers that also holds a mortgage broker’s license. It was not the thought of getting every nickel out of the transaction - but it was the thought of not seeing a person get ripped off and ensuring a loan program that met the needs of the individual better than one that produced the biggest payback for the purchaser.
In addition, it also involved knowing that I was working with a person that was pre-approved for a loan program.
However, today, I prefer to work only in real estate brokerage, because, I personally felt keeping up on the various loan programs became time consuming and produced less than personal quality services that I wanted to deliver to clients.
There are some real estate agents out there that might have more experience in credit and collection prior to entering the real estate professional, than some mortgage brokers or loan officers.
July 30th, 2007 at 6:03 amGlenn I remember the first time that I took my coins to a bank and they charged me to count them. They actually charged me to deposit money into my savings account. My parents closed the account the next day due to the bank wanting to make a buck or two for counting coins. Sad to say, but many banks still do this today.
I am currently with a small local bank that gives an extra 1% on the interest rate for kids savings accounts and has zero minimum account balances for them. Just had to put $5 in the account to open it. Teaching kids to save money is very important.
July 30th, 2007 at 9:51 amYep Glenn, I am to young to remember the days of free savings accounts. I think BOA has excellent customer service and I’ve thought about using their loan programs. But having more options through business contacts makes me feel weird to choose BOA.
July 30th, 2007 at 3:36 pmCould you imagine the fiasco it would have caused to allow banks into the real estate market? I think the subprime mess certainly helped kill the banks aspirations to enter the real estate market. The monopoly it would have created would have been devestating.
August 5th, 2007 at 2:06 pm