Real estate kickbacks fuel industry competition

Service providers blur line between ads, illegal rebates

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

Two months ago, I visited several homes on a weekend open house tour in an attempt to gauge how prices had risen in a specific area. While passing through a couple of homes, I commented to the veteran real estate agents hosting "the open" that the amount and quality of food for visiting potential buyers was impressive. One agent said: "Isn't it great? Thank goodness I don't have to pay the bill...I'll take what's left home to my grandkids." Clearly, the real estate agent is the key to the success of third-party providers–appraisal, credit report, title report, escrow, mortgage, etc. Agents can help steer home buyers and sellers to particular industry operators and most professionals choose competent individuals who will get the deal done. But the enticements for sending business to only one person and place are not always in the best interest of the consumer. The Real Estate Settlement and Procedures Act (RESPA) limits the amount third-party providers can spend on individua...