There is very little mercy mentioned or administered for those they catch…

I am still amazed at what is mentioned in the field (and online for that matter).

Discussions with agents (when I am in my rare “Agent” mode) from a few companies in my area seem to be the most likely to have me withdrawing or disavowing any part of the discussion.

These companies are the ones that litteraly hundreds of agents and usually one or two brokers!
There are quite a few of these “Ant Hills” in my area. The lack of supervision is of course (in my opinion) the reason for the demonstrable lack of ethics or worse.

There is one shop in particular that actually pays agents for bringing in other agents. I don’t mean a human resource finder fee, I mean an ongoing monthly income! Its as close to illegal as you can get without being illegal, as I see it. The organization rents an office or two the size of a small bedroom and then signs up a couple of hundred agents. Charging them a monthly fee and then returning parts of the monthly fee for each agent they bring in, until they bring in a few and then they start to get paid for each additional agent they bring! Its actually a “down line” concept like you would find in a multi-level marketing oufit… Evidently its legal because the money comes to the employing broker and is then paid out by the broker. Point is can you imagine the lack of supervision in these places?

I had to tell a client we couldn’t deal with one of their agents because I felt the risk of Federal prosecution for various offenses was too high for me to advise her to continue…

The fallout of this is evidenced in the size of the debacle we now face in the industry.
I have posted (on my blog) that the answer lies in the same level of regulation that has been applied to trainee appraisers. New law in Florida, certified appraisers can only supervise a maximum of three trainees. It should be so in real estate, maybe not the number three, but certainly not an unlimited number making money off each others arrival!
Just my opinion…

Vance – Thanks! We see celebrities and politicians fall from grace everyday and while we are not famous (well, most of us aren’t), our reputation within our community can make or break us.

You are spot-on with this post! It takes years of diligent effort to build a reputation of integrity. It takes only a moment to destroy that reputation.

The bottom line? Your title says it all. “Just say No.”

I won’t say these issues are exclusively lender territory. I recently had a young agent who mistakenly thought I was a new agent. Not that it should matter. My license number would make one think I was new, but I have seven years experience, most in other states.

After explaining that my seller can just give him $5000. at closing without the lender knowing, he says to me, ” I can tell by your license number, you are new, but this is completely legitimate. My broker wouldn’t sign it, if it were illegal”. I kindly explained to him, I am not new to the business and my seller will not be giving anyone money at closing. We worked it out legally!

Michelle – Me, too!

Mack – The difference being educated. Loan officers have just as much culpability as an agent who knows and does nothing. I had an agent friend who told her seller that the buyer was a crook, as was the lender, appraiser and everyone else in the deal. The buyer was getting $100,000 toward repairs (on a home which needed no repairs) paid to a LLC, which the buyer was coincidentally the manager of . She had it in writing she recommended the seller not accept the offer. A year later she was investgated by the Real Estate Commissioner and cleared of any wrong doing. She is a great agent and easily could have been indicted with everyone else in the scheme.

I’m always amazed at how completely casual and comfortable people are propositioning less-than-legal/ethical practices. It always makes me double-take!