I want to begin by saying Realtors are not “forced” to use the joint venture Title Company. With full access to the brokerage’s agents, office meetings, events, and a push from the Broker, the business capture rate on the real estate joint ventures is fairly high. Joint ventures between Title Companies and Realtor brokerages have existed for quite some time and are fairly prevalent today in the Washington DC/Northern Virginia area. Perhaps they exist in your market as well and maybe you currently participate in one. BUT…what if real estate joint ventures were told to disband and can no longer exist–effective tomorrow?
We have seen it many times…the managing real estate broker or office manager pushing hard for their agents to use certain vendors. Myself, have dealt with this when an agent says, “Wade, sorry…I wanted to send you the business but my office manager told me to use the Title Company where our office has the “relationship.” Ahh…the “relationship.” This is a very important aspect of this topic and we will address it a little later. In my experience, real estate brokers and office managers are there to help, inform, educate, and protect their Realtors. They are the greatest safety net and in many cases, a reason as to WHY an agent hangs their license at that particular real estate firm. Vendors however, are separate companies from the real estate brokerage and offer related services to the Realtors, such as Mortgage, Title Insurance, home inspection, technology, etc. With that said, can real estate agents be forced to use certain vendors?
I don’t want the title of this blog to scare you but at the same time the CFPB(Consumer Financial Protection Bureau) is out and about looking at Real Estate Companies, Title Companies, and Mortgage Lenders. What are they looking for? They are looking for suspicious and illegal activity that would warrant a fine, and in many cases very large fines. On the East coast and especially the Northern Virginia area there are many Real Estate Joint Ventures. The Join Ventures are usually between the Real Estate company and the Title Company. With the CFPB out in full force is your Real Estate Joint Venture set up correctly and safe?