When you’ve been in the real estate business for a few years, names of other agents start to become quite familiar and seeing a familiar name on an unfamiliar sign always draws a little extra attention.
Over the past two years, with the rush of bank owned homes in full swing, it’s become more and more common to see agents who had been with larger brokerages putting out their own shingle with an REO contract under their belt.
Financially, it’s hard to blame them … being your own broker means you’re not splitting your commission checks with anyone else. There’s other overhead, to be sure, but some of these agents already were covering the overhead along with a commission split.
But something yesterday clicked and I started thinking … once these agents sever ties with a brokerage and go out on their own, who is handling supervision? Put another way, does the ability to secure an REO contract automatically translate into the ability to operate a brokerage?
This is far from a blanket concern … I know a lot of these agents who have bank owned contracts; they knew what they were doing before REOs dominated the market and will know what they’re doing when all’s said and done.
But for some agents, whose real estate careers moved forward only with the REO contract, you have to wonder … the skill set for a bank owned home is so much smaller than for any other type of listing. There’s no real negotiation that takes place. The details of the Arizona purchase contract mean far less than the bank addenda. And, should something go south, the standard response tends to be “so what do you want me to do about it?”
Many bank owned listing agents have adopted the nonchalant attitude of the lenders whose homes they are selling even though that attitude often flies in the face of the “fair dealings” portions of NAR’s Code of Ethics, if not state law on occasion.
If these agents are at a brokerage, theoretically there’s some level of oversight in play. But once an agent puts out his own shingle to sell the homes, there’s really no one watching anything unless a formal complain is made with the state. Which doesn’t happen often.
It’s a scary thought. Yet it’s also the current reality of the Phoenix real estate market.