Why Aren’t Banks in Real Estate? Part 1

Why, because the National Association of Realtors (NAR) said so—that’s why.  And, their $100M dollars a year in political donations and beltway lobbying tells us nothing is likely to change.  Over the last ten years, NAR has spent nearly $1B dollars ensuring their status quo is maintained.  Under claims of “protecting” the industry, NAR has actually embalmed it. 

NAR also has a mountain of official governmental-looking reports all, written by them, outlining the economic disaster that would result if Banks were to enter the real estate industry.  Red flag: if NAR is spending millions defending their position, you can pretty much bet that position only benefits them.  Civility dictates we view NAR’s approach as “spin”, and not the outright deceptions they appear to be.

The American People Agree: Keep Banks Out.  No, they don’t.   NAR is using a “presumptive close” technique that’s pretty silly.  Americans agreeing? 

Banks want to Consolidate the Real Estate Industry? Who says, NAR?  Banks are run by armies of our nation’s finest MBA graduates and business scholars.   The real estate industry, not so much.  Yet, it’s the Realtors who are presuming to know what the Banking industry will do? 

Banks are Special – Let’s Keep Them That Way.  No condescending attitude there?  Good lord, they might as well have said, “bless their little hearts”.    

Allowing Banks in Real Estate will Hurt Competition.   There is simply no way of knowing this.  It also discounts any idea that allowing Banks in real estate may actually “help” competition. 

Allowing Banks in Real Estate will Hurt Consumers.  This is a Lie!  There is NO way Banks could do any worse than NAR for consumers.  Home sellers have been paying 6% commissions for over 50 years.  NAR and their cabal of controlled MLSs has caused enough harm to the American consumer.   

All said, one has to believe Banks would love to be in the real estate industry—it’s easy money.  They are uniquely positioned knowing the consumer and their financial history.  But, just like everyone else, they too are afraid of NAR.   Even Banks, who literally print money in the form of “merchant fees”, know they don’t have enough money to take on NAR.   Atlanta aside, NAR rules uncontested. 

But, this Blog isn’t about NAR.  This Blog is about Banking,

Greenwood is a new, 100% online banking platform based in Atlanta.  Founded by three Atlanta icons; Andrew Young, Killer Mike and Ryan Glover, Greenwood’s mission is both focused and far-reaching.    Founded on the premise of serving communities of color, their core mission is to recirculate dollars back into their communities.  

I encourage everyone to visit, www.bankgreenwood.com and read about what they are doing.  You will find it hard not to see their positivity and future-looking focus as anything but infectious.    

But, as a real estate Broker I couldn’t help but notice Greenwood’s focus on consumer wealth-building.  I point this out because the real estate industry and homeownership have long been springboards to wealth.   Statistically, the Black and Latino communities, who have been underserved for decades, have a much lower percentage of their community participating in homeownership.   Yet, homeownership IS the keystone to personal wealth.  Given Greenwood’s mission, if there ever was a Bank that could USE a real estate component, it would be a Bank like Greenwood. 

The sale of a home generates a scrum of people and companies all trying to get their piece of the transaction. Brokers, sales agents, inspectors, tradespeople, lawyers, insurance providers all have their hands out.   If wealth-building is the goal, wouldn’t one want to own as much as that sales channel as possible? 

But, according to NAR, Banks performing real estate functions would be disastrous to the economy.  While I beg to differ, it is important to realize, whatever position NAR takes, it means absolutely squat in Atlanta Georgia.  Atlanta is one of the very few real estate markets in the U.S. that is NOT indebted to NAR.   We don’t have to follow THEIR rules. 

How could Greenwood enter the real estate market?  As a DBA.

Wynd Realty is the only brokerage in Atlanta offering “true” DBA capability.  Our DBAs are all registered under GREC and can market under their own brands and manage themselves under their own rules of operation.  The DBA Program at Wynd Realty was created to act as an incubator for new ideas and concepts.      

Atlanta is the only U.S. real estate market that can challenge Banking restrictions.   Wynd Realty is the only Brokerage in Atlanta happy to cede their brand so other brands can grow.  If so inclined, Greenwood could be the very first Bank to own and operate a real estate “sales” brand.  

The possibilities are truly exciting.

Part 1 of this Blog introduces the concept of a Banking DBA realty brand.  In part 2, we will look at the logistics of such a concept as well as the overall benefits to those willing to take the risk.